Make sure the answers are correct, well written, clear, and easy to understand. DO NOT USE EXCEL. Use formulas, math and written explanation to solve the problem.

Calculate expected return, variance, standard deviation, covariance or correlation using the data below. Again DO NOT USE EXCEL. Thanks.

Data: State of Ecomony Probability of State of Economy 0.25 0.55 0.20 Rate of Return if State occurs (Stock A) 6% Rate of return if state occurs (Stock B) -20% Recession Normal Boom 7% 13% 11% 33%