a) What is the expected return of each asset?

b) What is the risk of each asset?

c) What is the portfolio return if you invest 30% in Stock Z and 70% in Stock X?

d) What is the standard deviation of the portfolio in part c if the correlation coefficient is -.4?

2. Use the information in the following table to answer the questions below State of the Economy Chances of occurrence Stock X Boom .30 5% Growth .40 7% Stagnant .20 5% Recession .10 10% Total 1.0 Stock z 24% 5% 6% 8%