DTF Investments Ltd has a two-stock portfolio: 40% invested in Apple stock and 60% invested in Pear stock. The table below sets out the expected return on the stocks for various states of the economy (returns are shown in decimals). What is the expected return of DTF Investments Ltd’s portfolio? Record your answer to the nearest four decimal places (e.g., If your answer is 3.40%, then report 0.0340).

State of economy	Probability	Apple Stock	Pear Stock
Boom	0.19	0.16	0.35
Normal	?	0.11	0.09
Bust	0.18	-0.16	-0.21

Answer rating: 100% (QA)

Individual expected returns are calcu... View the full answer