Consider the following information on stocks a and b

State of the economy	probability	Stock a	Stock b
Recession	0.10	- 0.20	0.14
normal	0.60	0.10	0.24
boom	0.30	0.42	0.28

The market portfolios return is 14% , and the risk free is 6%

Calculate the expected return and standard deviation of stock a and b, respectively

Based upon the expected return of a and b calculated in part a find out their betas

Compute the co-variance between stocks A and B

Consider a portfolio which puts 60% of the money on stock A and the rest of the money on stock B, what must be the expected return and standard deviation of such a portfolio