There are two stocks in the market, Stock A and Stock B. The price of Stock A today is S65. The price of Stock A next year will be $54 if the economy is in a recession, ST7 if the economy is normal, and S87 if the economy is expanding. The probabilities of recession, normal times, and expansion are 10, T0, and .20, respectively. Stock A pays no dividends and has a correlation of .60 with the market portfolio. Stock B has an expected return of 13.0 percent, a standard deviation of 33.0 percent, a correlation with the market portfolio of .14, and a correlation with Stack A of .26. The market portfolio has a standard deviation of 17.0 percent. Assume the CAPM holds. a- What is the return for each state of the economy for Stock A? (A negative 1. answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Return Normal a- What is the expected return of Stock A? (Do not round intermediate 2. calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Expected retum a- What is the variance of Stock A? (Do not round intermediate 3. calculations and round your answer to 4 decimal places, e.g., 32.1616.) Variance a- What is the standard deviation of Stock A? (Do not round intermediate 4. calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Standard deviation a- What is the beta of Stock A? (Do not round intermediate calculations 5. and round your answer to 3 decimal places, e.g., 32.161.) Beta of Stock a- What is the beta of Stock B? (Do not round intermediate calculations 6. and round your answer to 3 decimal places, e.g., 32.161.) Beta of Stock If you are a typical, risk-averse investor with a well-diversified portfolio, which stock would you prefer? StockB Stock A b- What is the expected return of a portfolio consisting of 65 percent of Stock 1. A and 35 percent of Stock B? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places e.g., 32.16.) Expected retum b- What is standard deviation of a portfolio consisting of 65 percent of Stock 2. A and 35 percent of Stock B? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places e.g., 32.16.) Standard c. What is the beta of the portfolio in part )(Do not round intermediate to 3 decimal places, e.g. calculations 32.161.) and round your