Question: Question 2 Weight (X) 40% Weight (Y)= 60% State Prob. of state Stock X Ret Stock Y Ret Boom 30% 15% 10% Normal 70% 8%

Question 2 Weight (X) 40% Weight (Y)= 60% State Prob. of

Question 2 Weight (X) 40% Weight (Y)= 60% State Prob. of state Stock X Ret Stock Y Ret Boom 30% 15% 10% Normal 70% 8% 5% As shown above, your portfolio has 40% invested in stock X and 60% in Y. What is the expected return of stock Y? O (15% + 10%)/2 40% * 15% + 60% * 10% 40%* 10% + 60%*5% 30% * 10%+ 70% 75%

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