Consider the following information:

a. Calculate the expected return, and standard deviation of A and B

b. If you invest 60% of your money in Asset A (and the rest in B), what is the expected return for the portfolio in each state of the economy?

c. What is the expected return for the portfolio as a whole (considering both states of the economy)?

State Boom Bust Probability A B 20% -5% 15% -15%