4) Calculate the expected return and standard deviation of for single stocks and portfolio You have estimated the following probability distributions of expected future returns from X and Y: stockx stockY rate of rate of Economy Recession | 10% Below, average-20% Average prob return return -10% 10% , 5% 40% | 2% average+um.-t. 15% 7% 15% 1% -3% -2% Boom 10% . a) What is the expected return for stock X and Y? Expected return of X Expected return of Y ? b) What is the standard deviation of expected returns for stock X and Y? Standard deviation of X Standard deviation of Y 2 c) Calculate the expected return and standard deviation of the mix of 50% X and 50% Expected return of the mix of 50% X + 50% Y which stock would you consider to be riskier, X, Y, or 50% X + 50% Y? why? (hint: calculate the coefficient of variation (COV) standard deviation /expected return and compare.) Hints: please study the slides for the explanation of calculations. d) which do you pick