Stocks X and Y have the following probability distributions of expected returns for four possible economic states.

Economy State	Probability	Stock X	Stock Y
1	0.1	-8%	5%
2	0.4	-10%	8%
3	0.4	9%	-2%
4	0.1	14%	-10%

e. Calculate the two-stock portfolios standard deviation.

f. Calculate the two-stock portfolios beta.

g. If the overall market return is 8% and the risk-free rate is 1%, what is the two-stock portfolios required return?

h. How can you reallocate t