Use the following information to answer the two questions below. State of Prob. of the Rate of return if sate occurs
the economy state of economy Stock A Stock B
Boom 0.75 15% 4% Bust 0.25 5% 4% You MUST use 4 digits in every calculation you do in order for your answer to be the same as the one in the system. Enter answer using 4 decimals. Do not use or enter the %. For example, if your answer is 3.48% enter 0.035; if your answer is 0.12013 then enter 0.1201 4. What is the expected return of a portfolio with 20% in asset A and 80% in Asset B?
