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You decide to invest in a portfolio consisting of 35 percent Stock A, 35 percent Stock B, and the remainder in Stock C. Based on

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You decide to invest in a portfolio consisting of 35 percent Stock A, 35 percent Stock B, and the remainder in Stock C. Based on the following information, what is the expected return of your portfolio? State of Economy Probability of State of Economy .16 Recession Normal Boom Return if State Occurs Stock A Stock B Stock C -15.2% - 2.1% -21.0% 11.4% 6.7% 15.3% 25.0% 14.0% 29.9% .49 .35

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