You are interested in investing in two different funds: a corporate bond fund and

a common share fund. The following information about the annual return for a $1,000

investment in each fund under different economic conditions is available, together with

the probabily that each of these economic conditions will occur.

State of Corporate Common Probability the economy bond fund share fund 0.10 Recession -$30 -$150 0.15 Stagnation 50 -20 0.35 Slow growth 90 120 0.30 Moderate growth 100 160 0.10 High growth 110 250