subject principal finance

RISK AND RETURN 1. There are two assets and three states of the economy: Rate of Return if State Occurs State of Economy Probability of State of Economy Stock A Stock B Recession Normal Boom .20 .50 .30 -.15 .20 .60 .20 .30 .40 i. ii. What are the expected returns and standard deviations for these two stocks? Using the information in the previous problem, suppose you have RM20,000 total. If you put RM15,000 in Stock A and the remainder in Stock B, what will be the expected return and standard deviation of your portfolio