on your own Expected return, variance and risk (LO 3] You believe that there is a 50 per cent chance that the share price of Company I will decrease by 12 per cent and a 50 per cent chance that it will increase by 24 per cent. Further, there is a 40 per cent chance that the share price of Company M will decrease by 12 per cent and a 60 per cent chance that it will increase by 24 per cent. The correlation coefficient of the returns on shares in the two companies is 0.75. Calculate: a) the expected return, variance and standard deviation for each company's shores b) the covariance between their returns