State of the Economy		Probability of State of Economy		Rate of Return if State Occurs
Stock A			Stock B
Normal	0.82		0.12		0.14
Recession	0.18		-0.07		-0.10

You have a portfolio which is comprised of 45 percent of stock A and 55 percent of stock B.

a) What is the expected return for stock A? Please interpret your answer.

b) What is the standard deviation for stock A? Please interpret your answer.

c) What is the expected return for Sock B? Please interpret your answer.

d) What is the standard deviation for stock B? Please interpret your answer.

e) What is the expected return for this portfolio (i.e., Stock A and Stock B)? Please interpret your answer.

f) What is the standard deviation for this portfolio (i.e., Stock A and Stock B)? Please interpret your answer.