Question: Use the following table to answer these questions: Return on Return on Scenario Probability stock A stock B Boom 0.25 10% 2% Normal 0.35 10%

Use the following table to answer these questions: Return on Return

Use the following table to answer these questions: Return on Return on Scenario Probability stock A stock B Boom 0.25 10% 2% Normal 0.35 10% 16% Recession 0.4 3% 17% If you invest 70% of your funds into stock A and 30% into stock B, what is the expected return of your portfolio in each state of the economy? What is the overall expected portfolio rate of return? What is the standard deviation of the portfolio

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