Consider the following probability distribution for stocks
State Probability Return on stock a Return on stock B
1 0.10 10% 8%
2 0.20 13% 7%
3 0.20 12% 6%
4 0.30 14% 9%
5 0.20 15% 8%
If an equality weighted portfolio is formed out of these two stocks, calculate the portfolio weighted rate of return
