Question: You will use the following information to answer 5 different questions (I will repeat it again, but it is the same information). You own a
You will use the following information to answer 5 different questions (I will repeat it again, but it is the same information). You own a portfolio that is invested 50% in stock A and 50% in stock B. Given the following information on the returns of stocks A and B under the different states of economy, what is the expected return of the portfolio? State of the Economy Good Bad Probability 0.5 0.5 Stock A (Return) 20% -10% Stock B (Return) 0% 10% 10% 0% 15% 5%
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