1a.

The following information about a stand-alone investment is given:

Economic State	Probability of Occurrence	Rate of Return if State Occurs
Very poor	.10	(.25)
Poor	.20	(.05)
Average	.40	.15
Good	.20	.35
Very good	.10	.55
	1.00

The coefficient of variation in decimal form rounded to the nearest .001 is __________.

1b.

The following information about Stock A & Stock B is given:

	Stock A	Stock B
Expected return	.10	.12
Standard deviation	.11	.219
Market beta	1.2	.80

The returns of Stock A and Stock B are highly negatively correlated. If Stock A and Stock B are combined into a 50:50 (A:B) portfolio, the expected return on the portfolio in decimal form rounded to the nearest .001 will be __________

1c. The returns of Stock A and Stock B are highly negatively correlated. If Stock A and Stock B are combined into a 50:50 (A:B) portfolio the portfolio beta rounded to the nearest .001 will be __________

1d. IF the returns of Stock A and Stock B are highly negatively correlated. If Stock A and Stock B are combined in a 50:50 (A:B) portfolio the portfolio standard deviation in decimal form rounded to the nearest .001 would be __________ - multiple choice: Less than 0.11/ Cannot be determined from the information/ Greater than .219/ Between 0.11 and .219

1e. IF the returns of Stock A and Stock B are perfectly negatively correlated. If Stock A and Stock B are combined in a 50:50 (A:B) portfolio the standard deviation of the portfolio in decimal form rounded to the nearest .001 would be __________ multiple choice: .000/Cannot be determined from the information/Between .11 and .219/Greater than .219