State of the world	Probability	Security Returns X	Security Returns Market
Boom	.30	.15	.20
Normal	.40	.10	.07
Recession	.30	.05	.03
		E(Rx) .10	E(RMkt) .097
		= .0015	= ?

Is this distribution symmetrical? Calculate the covariance. Calculate the variance of the portfolio made up of 30% X and 70% of the Market. Find the Beta for the firm. Find the correlation coefficient. What does beta measure?

	Var	0.0015	0.004821
	Weight	0.3	0.7
Cov	0.00255
s2	0.00356829
b (Beta)	0.528935905
r (rho)	0.948256842