Two stocks, A and B, have return over the next years that depend on the state of the economy. There are four outcomes, depending on the economy.

Scenario Analysis 1. Two stocks, A and B, have returns over the next year that depend on the state of the economy. There are four possible outcomes, depending on the economy Economy Boom Above Average Below Average Recessiorn Probability 0.1 0.4 0.4 0.1 Return on StockA 20% 10% 0% -10% Return on Stock B 7% 5% 2% -5% (a) Calculate the expected returns for each stock. (b) Calculate the standard deviation of each stock's returns. (c) Calculate the correlation between the returns of the stocks