Compute expected rate of return

Reference no: EM1353564

RETURNS
State of Economy Probability of State Stock A Stock B Stock C
Boom .10 22% 18% 5%
Normal .85 14% 13% 11%
Recession .05 -28% 4% 17%

6. Tammy has a portfolio comprised of 10 percent stock A, 60 percent stock B, and 30 percent stock C. What is her expected rate of return?
a. 10.46 percent
b. 11.88 percent
c. 11.97 percent
d. 12.31 percent

Reference no: EM1353564

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