Given the following probability distributions for stocks A and B: State Probability of Occurrence Return on A Return on B Bust Boom (a) Compute the correlation coefficient of these two stocks (b) Assume that the inflation rate and risk free rate are, respectively, 4% and 0.4 0.6 5% 25% 10% -10% 6%, compute the expected (nominal) rate of return and REAL risk premium of an equally-weighted portfolio composing of these two stocks Compute the standard deviation of this 2-stock portfolio. (c)