. If you are given the following information on three shares:

		Rate of return if state occurs
State of economy	Probability of state	Share X	Share Y	Share Z
Growth	0.2	0.32	0.47	0.65
Normal	0.55	0.18	0.22	0.08
Recession	0.25	0.05	-0.17	-0.35

• i. Suppose you decide to invest 50 percent in share X, 30 percent in share Y and 20 percent in share Z. What would be the portfolios expected return and standard deviation?

• ii. If the expected risk premium is 10.56 percent, what is the expected cash rate?