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    Calculating the Expected Return

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    Calculate the expected return.
    State of Economy Probability of State of Economy Portfolio Return If State Occurs
    Recession 0.30 -0.14
    Boom 0.70 0.22.

    See the attached file.

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    Solution Summary

    Solution depicts the steps to calculate expected return in the given case. Calculations are carried out with the help of suitable built-in functions in MS Excel.