The following table shows the expected returns from six different stocks in three different states of the economy:

 

                               

State of Economy	Probability	Return Stock A	Return Stock B	Return Stock C	Return Stock D	Return Stock E	Return Stock F
Growth	1/3	30%	3%	15%	24%	0%	18%
Status Quo	1/3	22%	1%	3%	6%	3%	3%
Recession	1/3	20%	4%	-3%	-6%	6%	-3%

A) Calculate the expected return for each stock.

 

B) Calculate the standard deviation for each stock. 

 

 

c)Consider of a portfolio consisting of 50% in Stock A and 50% in Stock B. Calculate the covariance between Stocks A and B. Calculate the expected return of the portfolio. Calculate the standard deviation of the portfolio.

 

 

d)Consider of a portfolio consisting of 50% in Stock C and 50% in Stock D. Calculate the covariance between Stocks C and D. Calculate the expected return of the portfolio. Calculate the standard deviation of the portfolio.

 

 

E)Consider of a portfolio consisting of 50% in Stock E and 50% in Stock F. Calculate the covariance between Stocks E and F. Calculate the expected return of the portfolio. Calculate the standard deviation of the portfolio.