QUESTION 4 (25 points)

You are interested in investing in two assets, and there are four possible outcomes for each asset as follows :

Scenario	Probability	Return A	Return B
Economic Boom	15%	15%	22%
Moderated Growth	30%	12%	10%
Not very Good	25%	8%	7%
Economic Crisis	30%	-3%	-5%

1. Calculate the expected return of your investment wit 60% in A and 40% in B for each scenario.

2. Calculate the expected return of your portfolio as described in (1).

Calculate the variance of your portfolio as described in (1).