What is the expected return of an equally weighted portfolio comprised of the following three stocks?...

Transcribed Image Text:

What is the expected return of an equally weighted portfolio comprised of the following three stocks? Probability of State Rate of Return if State Occurs State of Economy of Economy Stock A Stock B Stock C Boom 0.64 0.19 0.13 0.31 Bust 0.36 .15 0.11 0.17 16.33 percent 18.60 percent 19.67 percent 20.48 percent 21.33 percent What is the expected return of an equally weighted portfolio comprised of the following three stocks? Probability of State Rate of Return if State Occurs State of Economy of Economy Stock A Stock B Stock C Boom 0.64 0.19 0.13 0.31 Bust 0.36 .15 0.11 0.17 16.33 percent 18.60 percent 19.67 percent 20.48 percent 21.33 percent