with Unequal Probabilities States of the Economy and Stock Returns Probability of State of Economy State of Economy Recession Boom Security Returns if State Occurs Starcents Jpod -20% 30% 70 10 1.00 . QUESTION #A: individual securities' expected return and standard deviation Suppose you thought a boom state would occur 20 percent of the time (So Recession probability = 1.00 -0,20 =0.80.) 1. What are the expected returns on Starcents and Jpod, respectively? 2. If the risk-free rate is 10 percent, what are the risk premiums for Startcents and Ipod, respectively? 3. What is the standard deviation of Starcents and Ipod, respectively? QUESTION #B: portfolio's expected return and standard deviation Using the above two securities information, you are forming a portfolio Suppose you invest 30% into Starcents and 70% into pods 1. What is the expected return of this portfolio? 2. What is the standard deviation of this portfolio