You are analysing a client's portfolio and advising them on their investment strategy. The following information is given on their portfolio: 60% is invested in A Plc and 40% is invested in B Plc. You are provided an earnings report on both companies by your equity research department. The table below provides expected return on each company in three possible states. State Recession 0.3 -40% 80% Prob. A plc B plc Normal 0.4 25% 2% Boom 0.3 90% -16% a. What is the expected return on the portfolio in each state and expected return on A plc and B plc?