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There are two assets and three states of the economy, answer the following questions State of Economy Probability of State of Economy Return of Stock

There are two assets and three states of the economy, answer the following questions

State of Economy	Probability of State of Economy	Return of Stock A if State Occurs	Return of Stock B if State Occurs
Recession	0.30	-0.10	0.08
Normal	?	0.20	0.15
Boom	0.20	0.30	0.20

1. Suppose you have $50,000 total. If you put $30,000 in Stock A and the remainder in Stock B, what are the portfolio returns in each state?

2. Suppose you have $50,000 total. If you put $30,000 in Stock A and the remainder in Stock B, what will be the expected return of your portfolio?

3. Suppose you have $50,000 total. If you put $30,000 in Stock A and the remainder in Stock B, what will be the standard deviation of your portfolio?

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