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Question 5 9 pts Suppose you allocate 4/5 of your portfolio value to a stock that has an expected return of 6% and the
Question 5 9 pts Suppose you allocate 4/5 of your portfolio value to a stock that has an expected return of 6% and the rest to another stock that has an expected return of 14%. What is the expected return on your two-stock portfolio? Note: Show your answer in units of percents, use plain numbers with at least two digits after the decimal (e.g., for 12.34%, type 12.34). D Question 6 Consider the following probability tree for the returns of a financial security: State of the Economy Probability Good 0.3 Average 0.4 Poor 0.3 Return 23% 13% 2% 9 pts What is the expected return? Note: Show your answer in units of percents, use plain numbers with at least two digits after the decimal (e.g., for 12.34%, type 12.34).
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