Question: What is the expected return on a portfolio which is invested 20% in stock A and 80% in stock B? State of Probability of Returns
What is the expected return on a portfolio which is invested 20% in stock A and 80% in stock B?
State of Probability of Returns if State Occurs
Economy State of Economy Stock A Stock B
Boom 20% 18% 9%
Normal 70% 11% 7%
Recession 10% -10% 4%
Answer is 7.74%, please show work
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