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A portfolio is expected to return 18 percent in a booming economy, 13 percent in a normal economy, and lowe 11 percent if the economy

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A portfolio is expected to return 18 percent in a booming economy, 13 percent in a normal economy, and lowe 11 percent if the economy talis into a recession. The probability of a boom is 3 percent while the probability of a recession is 25 percent. What is the overall portfolio expected retum? 8.40% 6.30 7.15% 6.05 2.81%

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