Problem 4 (32 points) Suppose that you are considering investing in a portfolio consisting of two securities, A and B. You have estimated that these two securities will provide the following set of state- contingent returns (A., and TB.), depending on how well or poorly the economy performs (note: P, represents the probability that states will occur): State of Economy Boom Bust Ps 50.00% 50.00% TA.S 5.00% 10.00% 1. (10 points) What are the expected returns for securities A and B? TB, 40.00% -5.00% 2. (10 points) What are the standard deviations of the returns for securities A and B? 3. (12 points) Suppose that state contingent returns on the risk free asset (..) and the market portfolio (ms) are estimated as follows: State of Economy Boom Bust P8 50.00% 50.00% 5.00% 5.00% Tm.s 25.00% 0.00% Using this information in conjunction with the information in Problem 4 on Securities A and B, are Securities A and B underpriced, overpriced, or correctly priced? Justify your answer.