Consider the following probability distribution for stock Societe Cr`eme Brulee (SCB) and Compagnie Mousse au Chocolat (CMC):

Scenario	Probability	Return of SCB	Return of CMC
A	0.5	0.14	0.11
B	0.2	0.26	-0.16
C 0.3 -0.09 0.07

1. Calculate the expected return of stocks SCB and CMC.
2. Calculate the variance and standard deviation of stocks SCB and CMC.
3. Calculate the covariance and correlation of stocks SCB and CMC.
4. Calculate the expected return and standard deviation for the following portfolios:
   1. All in SCB
   2. 20% in CMC and 80% in SCB.
   3. 40% in CMC and 60% in SCB.
   4. 60% in CMC and 40% in SCB.
   5. e 80% in CMC and 20% in SCB.
   6. All in CMC.
5. Go as far as you can to find the numerical value of the portfolio weight that achieves the minimum possible standard deviation.
6. Draw the investment opportunity set, and show the efficient frontier.
7. Suppose that the correlation between SCB and CMC were equal to -1, but their expected returns and standard deviations stay the same. What portfolio weights should you choose in order to eliminate all the risk in your portfolio?