Question: 18 What is the expected return on a portfolio that is equally weighted between stocks E and T given the following information? State of Economy

18

What is the expected return on a portfolio that is equally weighted between stocks E and T given the following information?

State of Economy Probability of State of Economy Returns if State Occurs
Stock E Stock T
Boom 0.30 20% 5%
Normal 0.70 16% 8%

Group of answer choices

13.32 percent

11.86 percent

11.13 percent

14.40 percent

12.15 percent

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