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 outside of excel!! or please list the formulas used so I can understand it

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