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Your two favorite companies are Firefox and Twitter. You feel like every year in the future will be randomly either a thumbs up year or
Your two favorite companies are Firefox and Twitter. You feel like every year in the future will be randomly either a "thumbs up" year or a "thumbs down" year, which will determine how high the annual return on your stock investment into each of these companies' stock will be, as shown in the table below: Firefox Twitter State of the economy Probability of the state of the economy "Thumbs up" 40% Return=25% Return=15% "Thumbs down" 60% Return=10% Return=20% (a) The Expected Return for Twitter's stock equals (b) The Expected Return of a portfolio with 30% invested into Firefox stock and 70% invested into Twitter stock equals
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