Consider the following information:

State of the economy Probability of the Economy Stock A Stock B Stock C

Boom 0.25 0.35 0.45 0.25

Normal 0.50 0.20 0.25 0.15

Poor 0.25 - 0.10 -0.15 - 0.10

a. Calculate the Expected returns of the stocks individually.

b. Now, you have the expected values of the stocks, assume that, Your portfolio is invested 30% each in stock A and stock B. What is the return of the portfolio?