You are considering investing your savings in equity investments. You have researched two particular equity investments and consulted several Central Bank reports. The following is the result of your research: State of the Economy High Growth Moderate Growth Probability 10% Expected Return Expected Return on Stock A on Stock B 60% 5% 20% 20% 25% 50% 5% No Growth Recession 10% -25% 20% 0% Required: a. Calculate the expected return of Stock A and the expected return of Stock B. (5 marks) b. Calculate the standard deviation of Stock A and Stock B. (7 marks) c. Which investment is preferable and why? (3 marks) d. Suppose you combined the investments in a portfolio and invest $6,000 in Stock A and $14,000 in Stock B. Calculate the expected return of the portfolio. (4 marks) e. Calculate the standard deviation of the portfolio assuming a correlation coefficient of 0.40. (6 marks)