State of the Economy	RA	RB	RC
Depression	-20%	5%	5%
Recession	10%	20%	5%
Normal	30%	-12%	5%
Boom	50%	9%	-3%

You are thinking about a portfolio where you put half your money in stock A (see above table for returns) and half your money in the risk free asset (like a Treasury bill). The risk free asset has a return of 5%.

1. What is the variance and standard deviation of the risk free asset?

2. What is the covariance between stock A and the risk free asset?

3. What is the expected return on your portfolio?

4. What is the variance on your portfolio?

5. What is the standard deviation on your portfolio?