3. Use the information in the table below (related to Tostitos Corp.) to answer the following questions.

   1. Economic State	Probability (%) Return (%)
      Deep Recession	10	-15
      Recession	20	-10
      Normal Economy	50	2
      Economic Expansion	20	15

      What is the expected return for Tostitos Corp.s stock? [3 points]

   2. What is the Tostitos Corps standard deviation of returns? [4 points]

   3. What is the 95% confidence interval associated with the returns of Tostitos Corp.s

      stock? [3 points]

4. You form a two-stock portfolio by combining Tostitos Corp.s stock (from Question 3 above) along with the stock of TD Bank. TD Bank has a marginal tax rate of 25% and a cost of debt of 3.25%. TD Banks stock has an expected return of 9%, a standard deviation of returns of 25%, and a correlation coefficient with Tostitos Corp.s returns of 0.65

   1. If you wish to create a portfolio with an expected return of 5%, what is the weight of each of Tostitos Corp. and TD Bank that you would hold? [4 points]

   2. What is the standard deviation of returns of this portfolio? [3 points]

   3. What is the 95% confidence interval associated with this portfolio? [3 points]