Probability of above average economy

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Reference no: EM132016029

There is a 23.73% probability of an average economy and a 76.27% probability of an above average economy. You invest 14.76% of your money in Stock S and 85.24% of your money in Stock T. In an average economy the expected returns for Stock S and Stock T are 14.37% and 6.36% , respectively. In an above average economy the the expected returns for Stock S and T are 35.19% and 18.20% , respectively.

What is the expected return for this two stock portfolio?

Reference no: EM132016029

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