4. Diversification can eliminate risk if two events are perfectly negatively correlated. Suppose that two firms are competing for a government contract and have an equal chance of winning. Because only one firm can win, the other must lose, so the two events are perfectly negatively correlated. You can buy a share of stock in either firm for $20. The stock of the firm that wins the contract will worth $40, while the stock of the loser will worth $10. If you buy two shares of one firm, calculate the expected value and variance of two shares. If you buy one share on each firm, calculate the expected value and variance of two shares.