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Q2) There is a 12.60% probability of an average economy and a 87.40% probability of an above average economy. You invest 28.50% of your money
Q2) There is a 12.60% probability of an average economy and a 87.40% probability of an above average economy. You invest 28.50% of your money in Stock S and 71.50% of your money in Stock T. In an average economy the expected returns for Stock S and Stock T are 9.00% and 11.50%, respectively. In an above average economy the the expected returns for Stock S and T are 35.50% and 28.40%, respectively. What is the expected return for this two stock portfolio? (2 points) |
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