A. A portfolio is comprised of 60% of Stock A and 40% of Stock B. Consider the following information, what is the expected return of the portfolio?

State	Probability	Return on Stock A	Return on Stock B
Boom	5%	28%	11%
Normal	80%	14%	8%
Recession	15%	-32%	4%

7.7%

8.3%

9.1%

6.4%

B. Stock A has an expected return of 15%; stock B has an expected return of 8%. What is the expected return on a portfolio is comprised of 60% of Stock A and 40% of Stock B?

12.2%
		10.8%
		9.1%
		14.4%

Please answer Both parts A and B