Florida Company (FC)and Minnesota Company (MC)are Both Service Companies

Multiple Choice

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

A) 12%
B) 10%
C) 11%
D) 9%