You have a portfolio which is comprised of 70 percent of stock A and 30 percent of stock B. What is the expected return on this portfolio?

State of Economy	Probability	E(R) A	E(R) B
Weight	0	60%	40%
Boom	0.2	20%	15%
Normal	0.6	12%	8%
Recession	0.2	-10%	3%

		7.30 percent
		7.58 percent
		8.03 percent
		8.96 percent
		9.40 percent