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Sam decides to invest $300,000 in stock A and $100,000 in stock B. He has forecast the possible returns for A and B, which will

Sam decides to invest $300,000 in stock A and $100,000 in stock B. He has forecast the possible returns for A and B, which will vary according to the state of the economy. The projections are as follows

Economy RA (%) RB (%) Probability (%)

Strong 21 9 30

Average 10 18 40

Weak -5 3 30

Given this information:

i.What is the expected return of Sam's portfolio?

ii.What is the risk of Sam's portfolio?

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