Economics - Finance - Expected return on portfolio
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1. Sam Tsantes has analyzed two stocks, Acme Airlines and Ajax Travel Associates. His analysis concludes that Acme has a 30% chance of producing a return of 10% and a 70% chance of producing a return of 15%. At the same time, Ajax has a 30% chance of losing 25% and a 70% chance of producing a return of 50%. If Sam invests $80,000 in Acme shares and $20,000 in Ajax shares. What is the expected return on the portfolio?
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