The following table presents forecasted returns for three companies under various potential states of the economy:
State | Probability | Stock X | Stock Y | Stock Z |
Above Average | 10% | 36.1% | 29.0% | 44.4% |
Average | 45% | 18.4% | 5.4% | 9.8% |
Below Average | 30% | -1.0% | -4.0% | -7.0% |
Recession | 15% | -12.4% | -6.0% | -15.3% |
Weight | 55% | 30% | 15% |
What is the expected return on a portfolio of these three companies constructed according to the weights given in the table? (Report answer in percentage terms and round to 2 decimal places. Do not round intermediate calculations).
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