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Q2) There is a 28.60% probability of an average economy and a 71.40% probability of an above average economy. You invest 10.40% of your money
Q2) There is a 28.60% probability of an average economy and a 71.40% probability of an above average economy. You invest 10.40% of your money in Stock S and 89.60% of your money in Stock T. In an average economy the expected returns for Stock S and Stock T are 12.60% and 10.00%, respectively. In an above average economy the the expected returns for Stock S and T are 35.90% and 30.90%, respectively. What is the expected return for this two stock portfolio? (2 points)
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