You have a portfolio that is comprised of 65 percent of stock A and 35 percent of stock B (See table below) What is the expected rate of return on this portfolio State of Economy Probability of State of Economy Rate of Return if State Occurs Stock A Stock B Boom 0 15 17 12 Normal 0 65 10 7 Recessio...

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You have a portfolio that is comprised of 65 percent of stock A and 35 percent of stock B (See table below). What is the expected rate of return on this portfolio?

State of Economy	Probability of State of Economy	Rate of Return if State Occurs
		Stock A	Stock B
Boom	0.15	17 %	12 %
Normal	0.65	10 %	7 %
Recession	0.20	-21 %	1 %

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Fundamentals of Corporate Finance

ISBN: 978-0132148238

2nd edition

Authors: Berk, DeMarzo, Harford

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Posted Date: Dec 08, 2022 07:14 AM

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You have a portfolio that is comprised of 65 percent of stock A and 35 percent of

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Fundamentals of Corporate Finance

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