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PLEASE ANSWER ALL 3 PARTS. Probability Stock A Stock B Boom 1/3 12.5% -10.45% Normal 1/3 15.8% 4.52% Recession 1/3 -2.5% 3.85% Average Return 8.6%

PLEASE ANSWER ALL 3 PARTS.

Probability

Stock A

Stock B

Boom

1/3

12.5%

-10.45%

Normal

1/3

15.8%

4.52%

Recession

1/3

-2.5%

3.85%

Average

Return

8.6%

-0.6933%

Standard Deviation ()

7.9637%

6.9044%

Question 1

What is the portfolio return if you invest equally in Stocks A and B?

Question 1 options:

8.7811%

9.2512%

8.3510%

3.9534%

Question 2)

What is the correlation between Stocks A and B? Using BA II Plus

Question 2 options:

-0.3089

-0.3567

0.3088

0.3567

Question 3

What is the portfolio standard deviation if you invest equally in Stocks A and B?

Question 3 options:

19.28%

4.39%

5.67%

8.95%

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