State of Economy	Probability of State of Economy	Rate of Return
		Stock A	Stock B	Stock C	Stock D		Stock	Dollar invested
Boom	20%	-15%	25%	33%	-20%		A	30,000
Good	40%	-5%	12%	15%	-5%		B	45,000
Poor	20%	15%	-7%	-5%	12%		C	-
Bust	20%	31%	-12%	-9%	34%		D	25,000

1. What is the expected return and variance of a portfolio invested 25% each in A, B, C and D? Will the resulting portfolio structure bring you a higher expected return?
2. How should you change the shares of securities A, B, C and D in your portfolio in order to minimize risk and maximize expected returns? Explain your answers.