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Q2) There is a 47.50% probability of an average economy and a 52.50% probability of an above average economy. You invest 22.20% of your money
Q2) There is a 47.50% probability of an average economy and a 52.50% probability of an above average economy. You invest 22.20% of your money in Stock S and 77.80% of your money in Stock T. In an average economy the expected returns for Stock S and Stock T are 7.90% and 14.90%, respectively. In an above average economy the the expected returns for Stock S and T are 34.40% and 27.30%, respectively. What is the expected return for this two stock portfolio? (2 points)
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