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You have created a portfolio. You invested 36% of your wealth in stock A and...

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Finance

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You have created a portfolio. You invested 36% of your wealth in stock A and remainder of your wealth you invested in stock B. There are two possible states of the world. The bad state has a 15% probability of occurring and the good state has a 85% probability of occurring. Stock A will have a return of -25.3% in the bad state and Stock A will have a return of 17.4% in the good state. Stock B will have a return of -3.9% in the bad state and Stock B will have a return of 16.0% in the good state. What is the expected return on the portfolio? Your answer should be shown as a percentage and it should be accurate to two decimal places

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