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Probability Stock A Economic Conditions Recession Normal Expansion 8% 15% 30% 55% Expected Return Stock B Stock C Stock D -5% 0% -10% 5% 7%

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Probability Stock A Economic Conditions Recession Normal Expansion 8% 15% 30% 55% Expected Return Stock B Stock C Stock D -5% 0% -10% 5% 7% 5% 10% 12% 20% 15% 20% Above is the expected return for FOUR different stocks listed in Bursa Malaysia during three different economic conditions in year 2023. As an investment advisor, you are required to suggest to your investor which of the below investment portfolio combination will provide the highest expected portfolio return for the investors. Perform the necessary calculation to determine the expected portfolio return for each of the investment portfolio combinations below and SUGGEST which investment portfolio combination would generate the highest expected portfolio return. [25 Marks Investment portfolio combination: i 20% in Stock A, 25% in Stock B and 55% in Stock D; ii. 45% in Stock A, 30% in Stock C and 25% in Stock D; 50% in Stock B, 20% in Stock C and 30% in Stock D

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