Question: Your answer: Question 14 (CHAPTER 13) Your two favorite companies are Firefox and Twitter. You feel like every year in the future will be randomly

Your answer: Question 14 (CHAPTER 13) Your two favorite companies are Firefox and Twitter. You feel like every year in the future will be randomly either a "thumbs up" year or a "thumbs down" year, which will determine how high the annual return on your stock investment into each of these companies' stock will be, as shown in the table below: State of the Probability of the Firefox Twitter economy state of the economy return return "Thumbs up" 30% 25% 15% "Thumbs down" 70% 10% 20% The Expected Return for Twitter's stock equals: (a) Twitter E[R] = 11.50% (b) Twitter E[R] = 12.00% (c) Twitter E[R] = 13.00% (d) Twitter E[R] = 18.00% (e) Twitter E[R] = 18.50% The Expected Return of a portfolio with 40% invested into Firefox stock and 60% invested into Twitter stock equals: (a) Portfolio E[R] = 15.00% (b) Portfolio E[R] = 15.50% (c) Portfolio E[R] = 16.00% (d) Portfolio E[R] = 16.90% (e) Portfolio E[R] = 17.40%

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