Toyota has an expected return of 23%, and a variance of 0.012. Honda has an expected return of 15%, and a variance of 0.008. The covariance between Toyota and Honda is 0.06. Using these data, calculate the variance of a portfolio consisting of 50% Toyota and 50% Honda.

The return on the Rush Corporation in the state of recession is estimated to be -23% and the return on Rush in the state of boom is estimated to be 34%. The return on the Oberman Corporation in the state of recession is estimated to be 44% and the return on Oberman in the state of boom is estimated to be -19%. Given this information, what is the covariance between Rush and Oberman if there is a 0.70 probability that the economy will be in the state of boom and a 0.30 probability that the economy will be in the state of recession.