7. A financial analyst has obtained the following information regarding two companies in different sectors namely, agriculture and manufacturing:

State of economy	Probability	Return of company in the agriculture sector (%)	Return of company in the manufacturing sector (%)
High economic growth	0.50	20	22
Average economic growth	0.30	14	16
Recession	0.20	10	12

Additional information:

i). The risk-free rate of return is 10%.

ii). The market risk premium is 5%.

iii). The market rate of return is 15%.

Required:

i). The expected return and standard deviation for each company.

ii). The correlation coefficient of the portfolio.

iii). The portfolio risk and return.

iv). The minimum return that should be considered acceptable for the portfolio.

v. Determine whether the portfolio is efficient.