1. Consider the following probability distribution for stocks A and B Probability State Return on Stock A Return on Stock B 11% 12% 30% 10% 15% 2 40% 18% 30% 15% 3 1) What are the expected rates of return of stocks A and B, respectively? 2) What are the standard deviations of stocks A and B, respectively? 3) What is the coefficient of correlation between A and B? 4) If you invest 50% of your money in A and 50% in B, what would be your portfolio's expected rate of return and standard deviation? risky 2. You invest $1000 in a asset with an expected rate of return of ().17 anda standard deviation of 0.40 and a T-bill with a rate of return of 0.04 1) What percentages of vour money must be invested in the risky asset and the risk-free asset respectively, to form a portfolio with an expected return of 0.11? 2) What percentages of your money must be invested in the risk-free asset and the risky asset respectively, to form a portfolio with a standard deviation of 0.20? 3) The slope of the Capital Allocation Line formed with the risky asset and the risk-free asset is equal to optimal portfolio if your 4) What is the weight you should put into risky asset to have an coefficient of risk aversion A= 4