Assume that an economy can have four states: Severe recession, Mild recession, Normal growth, Boom. Probability of each scenario, stock and bond annual returns in that scenario are provided below. Lets also assume that you are creating a portfolio with 70% stocks and 30% bonds.

Economy StateProbabilityStock Return (%)Bond Return (%)Severe recession 0.15-37-9Mild recession 0.30-1115Normal growth 0.30148Boom 0.2530-5

How much is the expected annual return on Stocks? Enter your answer in the following format: + or - 0.1234 Hint: The answer is between 0.0259 and 0.0296