Question
Gama Investment Ltd has a growth portfolio consisting of an equally weighted holding of four shares. If the economy is experiencing boom conditions which is
Gama Investment Ltd has a growth portfolio consisting of an equally weighted holding of four shares. If the economy is experiencing boom conditions which is 69% of the time, the balance will be bust conditions. If the shares are expected to return the following returns (in decimals) for each state of the economy.
| State of Economy | Share A | Share B | Share C | Share D |
| Boom | 0.194 | 0.200 | 0.287 | 0.248 |
| Bust | 0.046 | -0.239 | -0.004 | -0.023 |
What is the expected return of Gama Investment Ltd.'s growth portfolio?
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Economics
Authors: R. Glenn Hubbard
6th edition
978-0134797731, 134797736, 978-0134106243
