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1 . Consider the following information State of Economy Probability of State of Economy Rate of Return if State Occurs Stock S Stock T Boom

1.Consider the following information
State of
Economy Probability of
State of Economy Rate of Return
if State Occurs
Stock S Stock T
Boom .2022%18%
Normal .8015%14%
i) What is the expected return for stock S? For Stock T?
ii) What is the standard deviation for Stock S? For stock T?
iii) What is the coefficient of variation for Stock S? For stock T?
iv) If you invest 40% of your money in stock S and 60% in stock T, what is the expected return of the portfolio
v) Find the return of your portfolio when a) economy is booming and b) economy is normal.
vi) What is the standard deviation for your portfolio?

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