There are two assets and three states of the economy:

What are the expected returns and standard deviations for these two stocks? Suppose you have $20,000 total. If you put $15,000 in Stock A and the remainder in Stock B, what will be the expected return and standard deviation of your portfolio? If risk free rate is 5%, whats stock As sharpe ratio?

State of Economy Recession Normal Boom Probability of State of Economy .30 .50 Rate of Return If State Occurs Stock A Stock B -.15 .20 .20 .30 .60 .40 .20