There are two stocks you are considering to purchase. Stock X has an expected return of 12.75%, a standard deviation of 27 percent, a correlation with the market of 22 and a correlation with stock Yof 32. Stock Y is now trading at $48/share. The price of stock Y next year will be $39/share if there is a recession, $60 if the economy is normal and $72 if the economy is expanding. The probability of a recession is 15% and normal is 55%. Stock Y has a 7 correlation with the market portfolio. The market portfolio has a standard deviation of 16%. a) What is the expected return and standard deviation of a portfolio that holds 60% in stock X and 40% in stock Y? Upload Choose a File