What is the expected return for this two stock portfolio

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Reference no: EM132011142

There is a 22.50% probability of an average economy and a 77.50% probability of an above average economy. You invest 13.90% of your money in Stock S and 86.10% of your money in Stock T. In an average economy the expected returns for Stock S and Stock T are 6.40% and 9.70%, respectively. In an above average economy the the expected returns for Stock S and T are 17.20% and 26.30%, respectively.

What is the expected return for this two stock portfolio?

Reference no: EM132011142

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