Question
The following table reports forecasted returns for the stock of two different companies under three possible states of the economy: State Probability Stock A Stock
The following table reports forecasted returns for the stock of two different companies under three possible states of the economy:
| State | Probability | Stock A | Stock B |
| Expansion | 15% | 13.17% | 16.04% |
| Average | 65% | 7.52% | 6.02% |
| Recession | 20% | -0.72% | -4.82% |
What is the expected return on a portfolio that consists of 55% of funds allocated to Stock A and the rest in Stock B? (Report answer in percentage terms and round to 2 decimal places. Do not round intermediate calculations).
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Succeeding in Business with Microsoft Excel 2013 A Problem Solving Approach
Authors: Debra Gross, Frank Akaiwa, Karleen Nordquist
1st edition
978-1285099149, 9781285963969, 1285099141, 1285963962, 978-1285715346
