Question 9 (1 point) The following table describes the expected return of 3 stocks: A, B, C under three possible economic states. The probability of each state is indicated in the last row. What would be the expected return on a portfolio that invests 20% of wealth in stock X, 50% in stock Y, and 30% in stock Z?

Good economy

Average economy

Poor economy

Stock X return

18%

11%

-10%

Stock Y return

9%

7%

4%

Stock Z return

6%

9%

13%

Probability of state

0.2

0.7

0.1

Question 9 options:

a)

9.50%

b)

8.25%

c)

7.40%

d)

8.33%

e)

9.45%