Florida Company (FC) and Minnesota Company (MC) Are Both Service

Multiple Choice

Florida Company (FC) and Minnesota Company (MC) are both service companies. Their historical return for the past three years are: FC: - 5%, 15%, 20%; MC: 8%, 8%, 20%. If FC and MC are combined in a portfolio with 50% of the funds invested in each, calculate the expected return on the portfolio.

A) 12%
B) 10%
C) 11%
D) None of the above.