Question: Consider the following information: State / Probability / Stock A / Stock B / Stock C Boom / 0.65 / 0.29 / 0.12 / -0.06
Consider the following information:
State / Probability / Stock A / Stock B / Stock C
Boom / 0.65 / 0.29 / 0.12 / -0.06
Bust / 0.35 / -0.15 / -0.05 / 0.09
What is the expected return on an equally weighted portfolio of these three stocks? (Hint: Equally means that each stock has the same weight. Given that there are only 3 stocks, each has a weight of 1/3) Enter the answer with 4 decimals (e.g. 0.1234).
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