You Have a Portfolio Which Is Comprised of 70% of Stock

Multiple Choice

You have a portfolio which is comprised of 70% of Stock A and 30% of Stock B. What is the expected return on this portfolio?
$\begin{array}{lrrr}\text { State of the Economy } & \text { Probability } & \text { E(R) }_{A}& \text { E(R) }_{B}\\\text { Weight } & &70 \% & 30 \% \\\\\text { Boom } & .2 & 20 \% & 14\% \\\text { Normal } & .6 & 12 \% & 8 \% \\\text { Recession } & .2 & -8 \% & 5\%\end{array}$

A) 9.30%
B) 9.58%
C) 10.03%
D) 11.79%
E) 12.40%