The following table represents the rate of returns of three stocks in different economic conditions along with their probabilities (the data are also uploaded on moodle) RATES OF RETURN ON STOCKS EXPECTED ECONOMIC CONDITIONS PROBABILITY STOCKA STOCKB STOCKC 0.35 0.05 0.5 0.2 RECESSION STABLE 0.4 0.1 0.3 0.25 EXPANDING 0.25 0.15 0.51 0.35 Answer the following by using mathematical calculations a) Calculate the expected return and the standard deviation of the portfolio consisting 30% in stock A and 70% in stock B. (4 marks) b) Discuss the risk and return associated with investing All of your funds in stock A ii. All of your funds in stock B 30% of your funds in stock A and 70% of your funds in Stock B. The following table represents the rate of returns of three stocks in different economic conditions along with their probabilities (the data are also uploaded on moodle) RATES OF RETURN ON STOCKS EXPECTED ECONOMIC CONDITIONS PROBABILITY STOCKA STOCKB STOCKC 0.35 0.05 0.5 0.2 RECESSION STABLE 0.4 0.1 0.3 0.25 EXPANDING 0.25 0.15 0.51 0.35 Answer the following by using mathematical calculations a) Calculate the expected return and the standard deviation of the portfolio consisting 30% in stock A and 70% in stock B. (4 marks) b) Discuss the risk and return associated with investing All of your funds in stock A ii. All of your funds in stock B 30% of your funds in stock A and 70% of your funds in Stock B