Table 1		Rate of Return if state occurs
State of Economy	Probability of State of Economy	Stock A	Stock B
Boom	0.2	20%	15%
Normal	0.8	10%	5%
3. Using the information from table 1, what are the expected returns for stocks A, and B? (5)
Stock A
Stock B
4. Using the information from table 1,
what is the expected return on a portfolio that is invested 60 percent in stock A and 40 percent in stock B. (5)