What is the expected return of an equally weighted portfolio comprised of the following three stocks? State of Economy Probability of State of Economy Rate of Return if State Occurs Stock A Stock B Stock C Boom 0

Finance Dec 05, 2020

What is the expected return of an equally weighted portfolio comprised of the following three stocks?
State of Economy Probability of State of Economy Rate of Return if State Occurs Stock A Stock B Stock C Boom 0.64 0.19 0.13 0.31 Burst 0.36 0.15 0.11 0.17
CD 21.33 percent CD 19.67 percent CD 16.33 percent O 18.60 percent Q 20.48 percent

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So, the correct option is 4th "18.60%".

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