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State of Prob. of the Rate of return if state occurs the economy state of economy Stock A Stock B Boom 0 . 4 0

State of Prob. of the Rate of return if state occurs
the economy state of economy Stock A Stock B
Boom 0.400.150.05
Bust 0.60-0.050.05
1. What is the expected return of a portfolio with 75% in asset A and 25% in Asset B?
2. What is the variance of the portfolio with 75% in asset A and 25% in Asset B?

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