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You decide to invest in a portfolio consisting of 25 percent Stock A, 25 percent Stock B, and the remainder in Stock C. Based on the following information, what is the expected return of your portfolio? State of Economy Probability of State of Economy Return if State Occurs Stock A Stock B Stock C Recession .23 -14.0 % -1.5% -20.4% Normal .43 10.2 % 6.1 % 14.7% Boom .34 23.8% 13.4% 29.3% Multiple Choice 10.26% 9.81% 10.70% 12.65% 11.60%

You decide to invest in a portfolio consisting of 25 percent Stock A, 25 percent Stock B, and the remainder in Stock C. Based on the following information, what is the expected return of your portfolio? State of Economy Probability of State of Economy Return if State Occurs Stock A Stock B Stock C Recession .23 -14.0 % -1.5% -20.4% Normal .43 10.2 % 6.1 % 14.7% Boom .34 23.8% 13.4% 29.3% Multiple Choice 10.26% 9.81% 10.70% 12.65% 11.60%

EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 14P
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You decide to invest in a portfolio consisting of 25 percent Stock A, 25 percent Stock B, and the remainder in Stock C. Based on the following information, what is the expected return of your portfolio? State of Economy Probability of State of Economy Return if State Occurs Stock A Stock B Stock C Recession .23 - 14.0% -1.5% -20.4% Normal .43 10.2% 6.1% 14.7% Boom .34 23.8% 13.4% 29.3% Multiple Choice 10.26% 9.81% 10.70% 12.65% 11.60%
Transcribed Image Text:You decide to invest in a portfolio consisting of 25 percent Stock A, 25 percent Stock B, and the remainder in Stock C. Based on the following information, what is the expected return of your portfolio? State of Economy Probability of State of Economy Return if State Occurs Stock A Stock B Stock C Recession .23 - 14.0% -1.5% -20.4% Normal .43 10.2% 6.1% 14.7% Boom .34 23.8% 13.4% 29.3% Multiple Choice 10.26% 9.81% 10.70% 12.65% 11.60%
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