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Use the following information to find expected return for this portfolio. State of Economy Probability of...

Use the following information to find expected return for this portfolio.

State of Economy

Probability of State

Returns if State Occurs

Stock A

Stock B

Stock C

Stock D

Boom

40%

-15%

16%

25%

20%

Normal

30%

5%

10%

-3%

2%

Recession

30%

28%

6%

-10%

-5%

Portfolio Weights

10%

20%

30%

40%

ANSWERS:

11.20%

3.90%

8.19%

7.08%

7.30%

Solutions

Expert Solution

jeff jeffy answered 2 years ago
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