Consider an economy with two types of firms, S and I. S firms all move together. I firms move independently. For both types of firms, there is a 37% probability that the firm will have a 10%

return and a 63% probability that the firm will have a 2% return. What is the volatility (standard deviation) of a portfolio that consists of an equal investment in:

a. 24 firms of type S?

b. 24 firms of type I?