After graduating from the GBM program at Humber college you are making a good v. You are analyzing two Canadian Banks as investment options.Bank of Nova Scotia (BNS) and Bank of Montreal (BMO).The stock price of BNS is current $65.The price of BNS next year will be $53 if the economy is in a recession, $73 if the economy is normal, and $85 if the economy is expanding.The likelihood of recession, normal or expansion are 0.2, 0.6 and 0.2. respectively.BNS had suspended their dividend due to the pandemic crisis and has a beta of 0.68.BMO has continued to pay its dividends andhas an expected return of 13%, a standard deviation of 34%, a beta of 0.45, and a correlation with BNS of 0.48.The market portfolio has a standard deviation of 14%.

Assuming that the CAPM holds, what is the expected return and standard deviation of BNS?

After careful analysis you decide to invest 60% of your portfolio in BNS and 40% in BMO.What are the expected return, standard deviation and beta of this portfolio?