Question: The following table shows the annual expected returns for two stocks. Probability of return 0.10 0.20 0.40 0.20 Stock A -5% 2 7 Stock B

The following table shows the annual expected returns for two stocks.

The following table shows the annual expected returns for two stocks. Probability of return 0.10 0.20 0.40 0.20 Stock A -5% 2 7 Stock B -10% 1 8 16 0.10 17 24 If a portfolio is made up of 40% of Stock A and 60% of Stock B, what will be the portfolio's expected rate of return? 5.7% 8.98% 5.48% 7.6%

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