x = 2

2) Please answer the questions below for War and Peace (WP) and Anna Karenina (AK) Corporations: (show all your computations) Economy Probability Recession Below Average Average Above Average Boom 0.15 0,20 0.25 0.15 0.25 Expected Returns WP Inc. AK Inc. -0.5x -0.3x -0.0x 0.0x 0.2x 0.1 x 0.4x 0.2x 0.6% 0.4x a) Compute the expected retum of each stock. (7 pts) WP Inc.: AK Inc.: b) Compute the total risk (c) of each stock. (7 pts) WP Inc.: AK Inc.: c) Compute the coefficient of variation of each stock. Evaluate the results. (6 pts) WP Inc.: AK Inc. Evaluation