1.You have been given this probability distribution for the return for a stock:

State of the EconomyProbabilityReturn

Boom0.3022%

Normal growth0.2011%

Recession0.50-9%.

Calculate the standard deviation of the stock?

2..Two stocks A and B have return and risk information: E(r_A) = 8%, E(r_B) = 10%; s_A= 12%, s_B= 15%; r_AB= 0.6. The two stocks are used to construct a minimum variance portfolio. Answer the following questions:

2.1. (0.75 pt)What is the weight of stock A of the minimum variance portfolio?

2.2. (0.75 pts)What is the expected return of the minimum variance portfolio?

2.3. (1 pt)What is the standard deviation of the minimum variance portfolio?