Exercise $5-31$ Static

An analyst has predicted the following returns for Stock A and Stock $B$ in three possible states of the economy.

a$.$ What is the probability of a recession? $($Round your answer to $2$ decimal places.$)$

Probability

b$.$ Calculate the expected return for Stock A and Stock B$.($Round your answers to $1$ decimal place.$)$

c$.$ Calculate the expected return for a portfolio that is invested $55\%$ in A and $45\%$ in B$.($Round your answer to $2$ decimal places.$)$