Compute the risk and return for a portfolio comprising 60 percent invested in the stock of company A and 40 percent invested in the stock of company B. Problems Jerome 1. Jerome is considering investing in a security that has the following distribution of possible one-year returns: Probability of occurrence Possible return 0.10 0.20 030 1830 0.10 -0.10 0.00 0.10 6:20 0.30 a. What is the expected return and standard deviation associated with the investment? b. Is there much "downside" risk? How can you tell? gan 2. Summer Storme is analyzing an investment. The expected one-year return on the invest- ment is 20 percent. The probability distribution of possible returns is approximately normal with a standard deviation of 15 percent. a. What are the chances that the investment will result in a negative return? b. What is the probability that the return will be greater than 10 percent? 20 percent? 30 percent? 40 percent? 50 percent? 3. Suppose that you were given the following data for past excess quarterly returns for Markese Imports, Inc., and for the market portfolio: