2. An Australian investor invests C$3mi in stock X and C$2mi in stock Y. State of Economy Probability Return (X) Return (Y) Change in Exchange Rate (%) Boom 0.5 30% -5% 17% Normal 0.3 15% 10% 10% Recession 0.2 - 10% 25% -5% a) Calculate the return and risk for this portfolio in foreign term. Also calculate the correlation between the 2 stock returns. b) Calculate the return and risk for this portfolio in domestic term. 2. An Australian investor invests C$3mi in stock X and C$2mi in stock Y. State of Economy Probability Return (X) Return (Y) Change in Exchange Rate (%) Boom 0.5 30% -5% 17% Normal 0.3 15% 10% 10% Recession 0.2 - 10% 25% -5% a) Calculate the return and risk for this portfolio in foreign term. Also calculate the correlation between the 2 stock returns. b) Calculate the return and risk for this portfolio in domestic term