Chance of expansion next year

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1) You believe there is a 60% chance of recession and 40% chance of expansion next year. If the annual return on PJ Nickel is -3% in a recession and 5% in an expansion, what do oyu expect the return on PJ Nickle to be next year?

2) If you invested 50% of your portfolio in a risk-free asset and 50% in a market index (like the S&P 500), what would be the estimated beta of your portfolio?

Reference no: EM131061258

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