You decide to invest in a portfolio consisting of 25 percent Stock A, 25 percent Stock B, and the remainder in Stock C. Based on the following information, what is the expected return of your portfolio?

Sate of Economy	Probability of State of Economy	Return	If State	Occurs
		Stock A	Stock B	Stock C
Recession	.22	-14.8%	-1.9%	-20.8%
Normal	.47	11.0%	6.5%	15.1%
Boom	.31	24.6%	13.8%	29.7%

Options:

• 10.43%

• 11.79%

• 10.88%

• 9.98%

• 12.86%