1. Suppose your expectations regarding the stock A and stock B are as follows:

1. Suppose your expectations regarding the stock A and stock B are as follows:

State of the Economy	Probability	Return A	Return B
Boom	0.2	40%	-10%
Normal growth	0.5	10%	10%
Recession	0.3	-20%	15%

Compute the expected returns and standard deviation of returns of stocks A and B, as well as the correlation coefficient between the returns of stock A and stock B.

Compute the expected returns and standard deviation of returns of stocks A and B, as well as the correlation coefficient between the returns of stock A and stock B.