1. An individual is considering investing in either the stock market, the bond market or The a fully-insured bank account (ie, zero risk) which offers a return of 4%. individual has identified the following possibilities regarding the stock market. probability .25 .40 .35 stock returns bond returns 2% 8% 11% 3% 5% 8% (a) Calculate the expected return, variance and standard deviation for stocks and bonds, and the covariance and correlation. Which investment would a risk-averse individual undertake? Explain. How would your answer change if the bank account offered 7%? Explain. How would your answer change if the bank account offered 9%? Explain. (b)