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Shamma Al Ghantoot has invested $63,400 in ABC shares and $31,800 in XYZ shares. Assume the market can have five states: very good, good, neutral,

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Shamma Al Ghantoot has invested $63,400 in ABC shares and $31,800 in XYZ shares. Assume the market can have five states: very good, good, neutral, bad and very bad. The probabilities for each state and the returns of two shares are given in the table below: State of the Stock 1: Stock 2: Probability of of Occurrence ABC XYZ Economy Very good Good 15% 15% 8% 9% 20% 12% Neutral 30% 7% 9% Bad 6% 20% 15% 6% -3% Very bad 4% Note: If your answer is in percentage points, round to two decimal points. o If your answer is in decimals, round to four decimal points. O a. Calculate the expected return for each stock separately. (2 points) Stock 1: Stock 2: b. Calculate the standard deviation of each stock separately. (2 points) Stock 1: Stock 2: c. Based on the information given and/or your findings above, explain which stock is a better investment. Why? (1 point) d. Calculate the expected return of a portfolio consisting of these two stocks. (1 point)

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