Question: Answer the following question based on the information below: State of Economy Probability Stock As return Stock Bs return Boom .4 15% - 30% Recession

Answer the following question based on the information below:

State of Economy

Probability

Stock As return

Stock Bs return

Boom

.4

15%

- 30%

Recession

.6

5%

40%

If you invest $50,000 in each of stocks A and B, what is the expected return for your portfolio?

a) 15.0%

b) 15.5%

c) 17.5%

d) 16.0%

e) 16.5%

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