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Q1. There is a 10.60% probability of an average economy and a 89.40% probability of an above average economy. You invest 14.70% of your money
Q1. There is a 10.60% probability of an average economy and a 89.40% probability of an above average economy. You invest 14.70% of your money in Stock S and 85.30% of your money in Stock T. In an average economy the expected returns for Stock S and Stock T are 13.50% and 12.00%, respectively. In an above average economy the the expected returns for Stock S and T are 17.60% and 25.00%, respectively. What is the expected return for this two stock portfolio?
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