• You are considering investing in two stocks. Your concern is that the economy may not do well. But you are fairly confident that the economy will grow at a normal rate with moderate inflation and interest rates given a range of economic outcomes over the next year.
• . Calculate the expected returns and standard deviation for each stock.

State of Economy	Probability of State of Economy	Rate of Return If State Occurs
		Stock A	Stock B
Recession	.20	.15	.20
Normal	.50	.20	.30
Boom	.30	.60	.40

Using the information above, suppose you have $20,000 total. If you put $15,000 in Stock A and the remainder in Stock B, and the economy exists in a normal state for one year, what will be the expected return and standard deviation of your portfolio?