a) Gold Industry plc and Metal Materials plc have the following expected returns in four different states of the economy. All states of the economy have equal probability of occurrence. State of economy Gold Industry plc Metal Materials plc Worst scenario -10% 15% Bad state -5% 6% Good state 12% 8% Best scenario 24% -4% (ii) Calculate the covariance and correlation coefficient between Gold Industry plc and Metal Materials plc. [6 marks] Assume the risk-free rate is 2%. If a portfolio invests 60% of its assets in Gold Industry plc , 25% of its assets in Metal Materials plc and 15% of its assets in risk-free assets, then what is the expected rate of return of the portfolio? What is the volatility of the portfolio? (iii)