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(a) a Fagus Ltd and Edgewood Ltd have the following probability distribution of returns: Economic conditions High growth Normal growth Slow growth Probability 0.5 0.2 0.3 Returns (% Fagus Ltd Edgewood Ltd 32 30 20 17 14 6 REQUIRED (1) Calculate the expected return of Fagus Ltd and Edgewood Ltd. [3 Marks) (ii) Calculate the standard deviation of Fagus Ltd and Edgewood Ltd. [4 Marks] (iii) Calculate the covariance between Fagus Ltd and Edgewood Ltd. [4 Marks] ] (iv) Calculate the correlation coefficient between Fagus Ltd and Edgewood Ltd [2 marks] An investor wishes to build a portfolio by investing in the companies of Fagus Ltd and Edgewood Ltd in the proportion of 30% and 70% respectively. (v) Calculate the expected return of the portfolio. [3 Marks] (vi) Calculate the standard deviation of the portfolio. [5 Marks]