State

Probability

Return on A

Return on B

Boom

$\mathrm{.}3$

$12\%$

$-2\%$

Normal

$\mathrm{.}6$

$8\%$

$2\%$

Bust

$\mathrm{.}1$

$4\%$

$6\%$

$$

Reference: Ref. $13-4$

What is the expected return on a portfolio with weights of $60\%$ in asset A and $40\%$ in asset B$?$

Question $5$ options:

$2\mathrm{.}2\%$

$4\mathrm{.}4\%$

$8\mathrm{.}8\%$

$5\mathrm{.}8\%$

$9\mathrm{.}9\%$