tate of the Economy		Probability of State of Economy		Rate of Return if State Occurs
Stock A			Stock B
Normal	0.82		0.12		0.14
Recession	0.18		-0.07		-0.10

You have a portfolio which is comprised of 45 percent of stock A and 55 percent of stock B.

e) What is the expected return for this portfolio (i.e., Stock A and Stock B)? Please interpret your answer.

f) What is the standard deviation for this portfolio (i.e., Stock A and Stock B)? Please interpret your answer.