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There are only two possible states of the economy. State 1 has a 79.00% chance of occurring. In State 1, Asset A returns 5.00% and
There are only two possible states of the economy. State 1 has a 79.00% chance of occurring. In State 1, Asset A returns 5.00% and Asset B returns 8.00%. In State 2, Asset A returns -3.00% and Asset B returns -6.00%. A portfolio of just these two assets is invested31.00% in Asset A (with Asset B comprising the remainder without any negative weights). What is the expected return of the portfolio? Group of answer choices
7.07%
1.00%
4.52%
-5.07%
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