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Q2) There is a 43.50% probability of an average economy and a 56.50% probability of an above average economy. You invest 41.20% of your money
Q2) There is a 43.50% probability of an average economy and a 56.50% probability of an above average economy. You invest 41.20% of your money in Stock S and 58.80% of your money in Stock T. In an average economy the expected returns for Stock S and Stock T are 6.90% and 5.60%, respectively. In an above average economy the the expected returns for Stock S and T are 37.90% and 11.80%, respectively. What is the expected return for this two stock portfolio? (2 points) |
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