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Consider a portfolio with weights of 0.6 in stocks and 0.4 in bonds. a. What is the expected rate of return on the portfolio on

Consider a portfolio with weights of 0.6 in stocks and 0.4 in bonds.

a. What is the expected rate of return on the portfolio on each separate scenario (state of the economy)?

b. What is the expected rate of return and standard deviation on the portfolio given the probability that each state of the economy may arise?

c. Would you prefer to invest in the portfolio, in stocks only, or in bonds only?

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