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Consider the following information: Rate of return if state occurs State of economy Probability of state of economy Stock A Stock B Boom 0.2 24%

Consider the following information:

Rate of return if state occurs

State of economy

Probability of state of economy

Stock A

Stock B

Boom

0.2

24%

45%

Good

0.35

9%

10%

Poor

0.3

3%

-10%

Bust

??

-5%

-25%

You have $2,000 invested in stock A and $3,000 invested in stock B. Compute the expected return and total risk of this portfolio.

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