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Problem 9. The following table repre depression next year and of the returns the two stocks will have sents your assessment of the probabilities of

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Problem 9. The following table repre depression next year and of the returns the two stocks will have sents your assessment of the probabilities of boom and Probability Return of stocks Economic conditions ABC 1 5% 5% Boom 23% 7 Depression Expected Return Risk 9% 4.6% a. Compute the expected return when you invest in only ABC stock. (2 points) Compute the risk when you invest in only XYZ stock. (2 points) Compute the risk when you invest 80% in ABC stock and 20% in XYZ stock. (6 points)

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