Scenarios Probability Expected return Standard deviation Rate of return for stock 30 Rate of return for bond 10 Boom .30 For stock For stock .40 15 5 For bond For bond Normal growth Recession .30 -20 -3 Investing 60% in stock fund Calculate the following 1- portfolio expected return 2- Covariance of returns on bond and stock 3- Correlation coefficient and what does it say 4- Standard deviation for portfolio