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Consider the following information Rate of Return If State Occurs State of Economy Boom Good Poor Bust Probability of State of Economy 15 50 .25

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Consider the following information Rate of Return If State Occurs State of Economy Boom Good Poor Bust Probability of State of Economy 15 50 .25 10 Stock A 35 12 01 Stock B 45 10 02 -.25 Stock C 17 -.05 -.09 Your portfolio is invested 30 percent each in A and C and 40 percent in B. What is the expected return of the portfolio? 10.41% 15.65% 12.78% 9.89%

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