The returns of stocks Avoxx (A) and Bioxant (B) depend on the approval of Avoxx's latest drug as follows:

FDA Regulatory Decision	Probability	Return	Return
Approved	30%	50%	25%
Rejected	70%	12%	5%

A) What are the expected returns and standard deviations of A and B? (Note: Your answer should be a number in percentage form. Do not enter '%'.)

E[]=____%

E[B]= ____%

SD()= ____%

SD(B)= ____%

Hint: When we know the probability of every value of , we can calculate the expected value of as,

E[]= .

The variance is,

Var()=E[2]E2[]=2()2 ,

and the standard deviation is SD()=Var().

B) What is the correlation between A and B? (Note: Your answer should be a number between -1 and 1.)

Corr(,) =

Hint: When we know the probability of every value of the pair (,), we can calculate the covariance between and as,

Cov(,)=E[]E[]E[]=,,()() .

Their correlation is,

Corr(,)=Cov(,)SD()SD() .

C) What is the expected return and standard deviation of an equal-weighted portfolio of A and B? (Note: Your answer should be a number in percentage form. Do not enter '%'.)

E[]=___%

SD()=____%