Question: QUESTION 4 State Probability 0.10 0.20 0.20 0.30 0.20 Return on Stock A Return on Stock B 10% 8% 13% 7% 12% 6% 14% 9%

QUESTION 4 State Probability 0.10 0.20 0.20 0.30 0.20 Return on

QUESTION 4 State Probability 0.10 0.20 0.20 0.30 0.20 Return on Stock A Return on Stock B 10% 8% 13% 7% 12% 6% 14% 9% 15% 8% Given the probability statistics of various economic states for two stocks, what must be the weight of each stock in the portfolio if it is on the efficient frontier

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