There are three possible states of economy-Boom, Growth or Recession and the returns on Ihser and Resque depend on which state will occur. The details for these projects are as follows:

(a) Calculate the expected return and standard deviation for each project

(b) What are the covariance and correlation coefficient between returns of Ihser and Resque

State of the economy Probability of the state of the economy Ihser(%) Resque(%) occurring Boom 0.15 40 10 Growth 0.60 30 15 Recession 0.25 -10 20