1 of 1 Consider the following probability distribution for stocks X and Y : State Probability Return on stock X Return on stock Y 1 .25 13% 14% 2 .5 10% 10% 3 .25 -6% -8% The correlation coefficient between the two stocks is 0.20. Write your answers to two decimal places. 1) What are the expected rates of return of stocks X and Y? 2) What is the risk for stocks X and Y? 4) If there exist a risk-free asset (rf) that earns 3% annual return. Find the weights of stock X and Y in the optimal risky portfolio. 5) Return and risk of the optimal risky portfolio (P). 7) Saiwa wants to invest in a complete portfolio. What proportion of investment should Salwa invest in the optimal risky portfolio? Identify Weight of P, Weight of stocks X and Y, and weight of risk-free rate. Salwa's degree of risk aversion is 7. 8) What are the risk and return for Salwa'complete portfolio? 9) What is Salwa's utility when investing in the complete portfolio