Question 2

Ms. Alya Jawaher is interested to invest her funds in Bahrains telecommunication sector and considering two stocks: Zain and STC. A total of 57% of her portfolio is allocated to Zain stock, whereas 43% invested in STC stock.

The rate of return for each stock across different economic scenarios are given in below table:

		Rate of Return
Economic Situation	Probability	Zain	STC	Portfolio	squared deviation
Burst	33.3%	-7%	17%
Normal	33.3%	12%	7%
Boom	33.3%	28%	-3%
Expected return
Variance
Standard Deviation

Answer the below questions:

1. Calculate the expected return for Zain stock and STC stock (2 marks)
2. Calculate the variance for Zain stock and STC stock (2 marks)
3. Calculate the standard deviation for Zain stock and STC stock (2 marks)
4. Calculate the portfolios expected return (2 marks)
5. Calculate the portfolios variance (2 marks)
6. Calculate the portfolios standard deviation (2 marks)