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1. below: Two portfolios A and B. Their returns across different states of economy are described State Boom Normal Recession Probability 30% 50% 20%

1. below: Two portfolios A and B. Their returns across different states of economy are described State Boom Normal Recession Probability 30% 50% 20% Return for Portfolio A 15% 10% -10% Return for Portfolio B 30% 15% -18% a. (15 pts) What is the mean and standard deviation of returns for portfolio A? What is the mean and standard deviation of returns for portfolio B? b. (15 pts) What is the covariance and correlation coefficient between portfolios A and B?

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