You have a portfolio which is comprised of 75 percent of stock A and 25 percent of stock B. What is the expected rate of return on this portfolio?

State of the Economy	Probability of State of Economy	Rate of Return if State Occurs
		Stock A		Stock B
Boom	0.10	24	%	15	%
Normal	0.85	12	%	12	%
Recession	0.05	-36	%	8	%

• 10.87 percent

• 12.80 percent

• 10.70 percent

• 12.11 percent

• 11.13 percent