Finance

You have the following projections for two stocks. State of economy Recession Normal Boom Possibility of state .20 .50 .30 Rate of return if state occurs Stock X -.15 .20 .60 Stock Y .20 .30 .40 a) What are the expected returns and standard deviations for these two stocks? b) Decide which stock the firm should invest in and justify your decision. c) Suppose the firm has $20,000 total and it wants to invest $15,000 in stock X and the remainder in stock Y. Using the above information, what would be the expected return and standard deviation of the firm's portfolio?