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Q2) There is a 51.20% probability of an average economy and a 48.80% probability of an above average economy. You invest 17.40% of your money
Q2) There is a 51.20% probability of an average economy and a 48.80% probability of an above average economy. You invest 17.40% of your money in Stock S and 82.60% of your money in Stock T. In an average economy the expected returns for Stock Sand Stock T are 7.10% and 7.60%, respectively. In an above average economy the the expected returns for Stock S and T are 12.90% and 36.90%, respectively. What is the expected return for this two stock portfolio? (2 points) Q3) You are invested 28.20% in growth stocks with a beta of 1.65, 36.20% in value stocks with a beta of 1.20, and 35.60% in the market portfolio. What is the beta of your portfolio? (1 point)
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