The returns of two stocks and one bond in 4 possible states of economies are given below. (20pts) Probability Stock A Stock B Bond C -10% 1% 6% Boom 9% (1) What is expected return and the standard deviation of the three assets? (2) What are the pairwise correlations among the 3 assets (i.e., PAB, PAC, PBC)? (3) What is the Sharpe ratio of a 10% stock A, 20% stock B, and 70% bond portfolio (assuming R-0)? Recession 10% Normal-bad 30% Normal-good 40% 20% -25% -5% 10% 30% 5% 5% 3% 1%