Use the following information to answer the two questions below.

You MUST use 4 digits in every calculation you do in order for your answer to be the same as the one in the system. Enter answer using 4 decimals. Do not use or enter the %. For example, if your answer is 3.48% enter 0.035; if your answer is 0.12013 then enter 0.1201

1. What is the expected return of a portfolio with 30% in asset A and 70% in Asset B?

2. What is the standard deviation of the portfolio with 30% in asset A and 70% in Asset B?

State of Prob. of the Rate of return if state occurs the economy state of economy Stock A Stock B Boom 0.40 0.12 0.04 Bust 0.60 0.02 0.04