RETURNS:
State of Economy Probability of State Stock A Stock B Stock C
Boom .10 22% 18% 5%
Normal .85 14% 13% 11%
Recession .05 -28% 4% 17%
You have a portfolio that is equally weighted among stocks A, B, and C. What is the expected return on your portfolio?
a. 11.87 percent
b. 12.15 percent
c. 12.22 percent
d. 12.48 percent