1.

Consider the following information:

				Rate of Return If State Occurs
State of	Probability of
Economy	State of Economy			Stock A			Stock B
Recession		0.19			0.10		?	0.14
Normal		0.60			0.13			0.15
Boom		0.21			0.18			0.32

A. Calculate the expected return for the two stocks. (Round your answers to 2 decimal places. (e.g., 32.16))

	Expected return
Stock A	%
Stock B	%

B. Calculate the standard deviation for the two stocks. (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16))

Standard deviation

Stock A

%

Stock B

%

2. What are the portfolio weights for a portfolio that has 140 shares of Stock A that sell for $50 per share and 120 shares of Stock B that sell for $40 per share? (Round your answers to 4 decimal places. (e.g., 32.1616))

	Portfolio weights
Stock A
Stock B