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A portfolio consists of 36 percent Stock A, 55 percent Stock B, and 9 percent Stock C. What is the portfolio expected return given the

A portfolio consists of 36 percent Stock A, 55 percent Stock B, and 9 percent Stock C. What is the portfolio expected return given the following:

State of Economy

Probability of State of Economy

Stock A Returns

Stock B Returns

Stock C Returns

Normal

.90

28%

21%

50%

Recession

.10

2

43

24

24.20 percent

25.59 percent

26.12 percent

21.89 percent

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