Multiple Choice
A portfolio is expected to return 18 percent in a booming economy,13 percent in a normal economy,and lose 11 percent if the economy falls into a recession.The probability of a boom is 3 percent while the probability of a recession is 25 percent.What is the overall portfolio expected return?
A) 8.40%
B) 6.83%
C) 7.15%
D) 6.05%
E) 2.81%
Correct Answer:
Verified
Correct Answer:
Verified
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