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What is the one-year expected return on a portfolio

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Stock A pays 30% in a boom, 10% in a normal economy, and -30% in a recession. Stock B pays -15% in a boom, 0% in a normal economy, and 20% in a recession. If all three states of the economy are equally likely next year, what is the one-year expected return on a portfolio that is 70% stock A and 30% stock B? Enter your answer as a percentage point without the % sign, and round it to the second decimal point (i.e., if the answer is 10.3456%, enter it as 10.34).

Reference no: EM132523555

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