Calculate the expected return and the standard deviation of the market portfolio and the risk-free security

1) (35 points) You have graduated from the university and started working in an investment bank as a junior analyst. In your weekly meeting today, your manager asked you to analyze investment opportunities for a client. You found three stocks in the market, Stock A, Stock B, and Stock C. You summarized all the information you gathered about these stocks in the table below. Stock A Stock C Stock B 4.8% Expected Return 9.1% 13.26% Standard Deviation 19.6% 19.6% 19.6% You are also looking at the market portfolio and risk-free investment opportunities. Information you have on these assets is summarized in the table below. State Probability Market Return Risk Free Asset Growth 0.26 35% 6% Normal 0.40 12% 6% Recession 0.34 -5% 6%