State of

Econom

Boom

Normal

Recession

Probability of State

Occurring

$\mathrm{.}08$

$87$

$05$

Stock $1112$

$40$ percent

pected retum on a portfolio that is invested $30$

Rate of Return $($LO$9,$ LOIO.LOII$)$

A $(\%)$

$15\mathrm{.}6$

$11\mathrm{.}22\mathrm{.}5$

Stock B $(\%)$

$132$

$9\mathrm{.}6$

Stock C $(\%)$

$1\mathrm{.}2$

$12\mathrm{.}9$

$8$

$-5\mathrm{.}6$

$1$