Question 25 a You own a portfolio with 70% invested in stock A and 30% in stock B. The probability of a boom in the market is 30% and a bust is 70%. Stock A earns 25% in a boom and loses 10% in a bust. Stock B loses 5% in a boom and earns 25% in a bust. What is the expected return on the portfolio? State Invest Probability Return Return Portfolio Wgts. Boom 0.3 0.25 -0.05 0.7 0.16 Bust 0.7 -0.1 0.25 0.3 0.005 Investment Shares 0.7 0.3 0.083 O .051 0.095 0.071 0.093