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Use the following information to answer the two questions below. State of Prob. of the Rate of return if state occurs the economy state of

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Use the following information to answer the two questions below. State of Prob. of the Rate of return if state occurs the economy state of economy Stock A Stock B Boom 0.70 0.20 0.02 Bust 0.30 -0.10 0.02 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 %. For example, if your answer is 3.48% enter 0.035; if your answer is 0.12013 then enter 0.1201 What is the expected return of a portfolio with 75% in asset A and 25% in Asset B? A What is the variance of the portfolio with 75% in asset A and 25% in Asset B

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