An investor has an investment fund of 2 million$ . She intends to apportion these funds into 2 securities (X =1,200,000) and (Y= 800,000)

State of Economy	Probability	Rate of return(X)	Rate of return(Y)
Depression	0.2	15%	20%
Boom	0.5	12%	18%
Recovery	0.3	8%	25%

(i) Required rate of return on each stock. (2mks)

(ii)The variance and standard deviation of returns for each stock (2mks)

(iii)Coefficient of Variation of returns (2mks)

(Iv)Expected return of the portfolio (1 mark)

(v)Standard deviation of the portfolio (2mks)

(vi)Covariance of returns of XY (2mks)

(Vii)Correlation coefficient between X and Y (2mks)