5) You own a portfolio containing the following stocks.

	Stock A	Stock B	Stock C	Stock D
$ Amount	$10,000	$5,000	$18,000	$7,000
Expected return	15.50%	9.80%	12.70%	20.90%
Stock beta	0.95	1.10	0.85	0.60

Calculate the following statistics: (1/100 of one percent without % sign, e.g. 12.671, if a negative percentage, -9.56):

1) Expected portfolio return: Answer

2)Expected portfolio standard deviation:

6) After extensive analysis, you predict the following returns for stocks A and B for three possible outcomes. Assume there are only three possible outcomes.

Outcome	Probability	Annual return
		Stock A	Stock B
Boom	30%	15%	25%
Normal	40%	10%	20%
Recession	30%	2%	1%

Calculate the following statistics: (1/1000 of one percent without % sign, e.g. 12.671, if a negative percentage, -9.56):

1) Expected return for stock A:

2) Expected return for stock B:

3) Standard deviation for stock A:

4) Standard deviation for stock B:

7) Suppose you have $15,000 to invest and you have purchased the following securities.

	Stock A	Stock B
$ Amount	$6,000	$9,000
Mean return	20.45%	10.85%
Standard deviation (sample)	35%	15%
Correlation coefficient	-0.85

Calculate the following statistics: (1/100 of one percent without % sign, e.g. 12.671, if a negative percentage, -9.56):

1) Expected portfolio return:

2) Expected portfolio standard deviation: