(2) Use the following scenario analysis for stock A, B, C and D to answer questions: Associated Rate of Return State of the Probability of Economy the State A B D 1 0.20 -10% 8% 12% 24% 2 0.30 7% 10% 5% 13% 3 0.30 5% 3% -5% 0% 4 0.20 8% -2% 8% -5% a. What is the expected returns for stocks A, B, C and D ? (2 marks) b. What are the standard deviations of returns on stocks A, B, C and D? (4 marks) c. If Mr. Paul' owned a portfolio with 30% of stock A, 30% of stock B, 20% of stock C, and 20% of D. Calculate the expected returns and the return standard deviations for the Mr. Paul's portfolio. (4 marks) d. Whats is the covariance and correlation coefficient between returns on stocks C and Mr. Paul's portfolio ? Please keep 6 decimals in the final answers of covariance ( 5 marks) (2) Use the following scenario analysis for stock A, B, C and D to answer questions: Associated Rate of Return State of the Probability of Economy the State A B D 1 0.20 -10% 8% 12% 24% 2 0.30 7% 10% 5% 13% 3 0.30 5% 3% -5% 0% 4 0.20 8% -2% 8% -5% a. What is the expected returns for stocks A, B, C and D ? (2 marks) b. What are the standard deviations of returns on stocks A, B, C and D? (4 marks) c. If Mr. Paul' owned a portfolio with 30% of stock A, 30% of stock B, 20% of stock C, and 20% of D. Calculate the expected returns and the return standard deviations for the Mr. Paul's portfolio. (4 marks) d. Whats is the covariance and correlation coefficient between returns on stocks C and Mr. Paul's portfolio ? Please keep 6 decimals in the final answers of covariance ( 5 marks)