1. ) Use the following information on returns and probabilities of Asset P and Asset Q for the next THREE questions.

Assume there are only two states of economy: Boom and Recession

State	Probability	P	Q
Boom	.80	20%	25%
Recession	.20	4%	6%

The expected return of P is ____________%.

(A) 16.8

(B ) 15.7

(C) 14.3

(D) 17.4

(E) 19.2

2.) The expected return of Q is ____________%.

(A) 18.6

(B) 21.2

(C) 19.3

(D) 20.4

(E) 22.7

3. ) What is the expected return (%) for a portfolio with an investment of $6,000 in Asset P and $4,000 in Asset Q?

The expected return of the portfolio is ______%.

(A) 17.3

(B) 20.1

(C) 18.6

(D) 19.2

(E) 20.9