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You decide to invest in a portfolio consisting of 15 percent Stock A, 20 percent Stock B, and the remainder in Stock C. Based

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You decide to invest in a portfolio consisting of 15 percent Stock A, 20 percent Stock B, and the remainder in Stock C. Based on the following information, what is the expected return of your portfolio? Return if State Occurs State of Economy Probability of State of Economy Stock A Stock B Stock C Recession .22 22 -15% -2.4% -21% Normal .52 12.0% 7.0% 16% Boom .26 26% 14% 30% O 13.6% 10.28% O 9.66% O 7.07% O-16.38% O 26.2%

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