Remember, the expected value of a probability distribution is a statistical measure of the average $($mean$)$ value expected to occur during all possible circumstances. To compute an asset's expected retum under a range of possible circumstances $($or states of nature$),$ multiply the anticipated retum expected to result during each state of nature by its probability of occurrence.

Consider the following case:

Dominic owns a two$-$stock portfolio that invests in Blue Llama Mining Company $($BLM$)$ and Hungry Whale Electronics $($HWE$).$ Threequarters of Dominic's portfolio value consists of BLM$\text{'}$s shares, and the balance consists of HWE's shares.

Each stock's expected return for the next year will depend on forecasted market conditions. The oxpected returns from the stocks in different market conditions are detailed in the following table:

$\backslash$table$[[$Market Condition,Probability of Occurrence,Blue Llama Mining,Hungry Whale Electronics$],[$Strong$,0\mathrm{.}20,42\mathrm{.}5\%,59\mathrm{.}5\%$