1. .1 Calculate the expected return and risk (standard deviation) for General Foods for 2018, given the following information:

   Probabilities	0.15	0.20	0.40	0.10	0.15
   Expected returns (%)	20	16	12	5	5

2. 7.2 Four securities have the following expected returns: A = 15 percent, B = 12 percent, C = 30 percent, and D = 22 percent. Calculate the expected return for a portfolio consisting of all four securities under the following conditions:
   1. The portfolio weights are 25 percent each.
   2. The portfolio weights are 10 percent in A, with the remainder equally divided among the other three stocks.
   3. The portfolio weights are 10 percent each in A and B and 40 percent each in C and D.
3. 7.3 Assume the additional information provided below for the four stocks in Problem 7.2.

   		Correlations with
   	(%)	A	B	C	D
   A	10	1.0
   B	8	0.6	1.0
   C	20	0.2	1.0	1.0
   D	16	0.5	0.3	0.8	1.0

   1. Assuming equal weights for each stock, what are the standard deviations for the following portfolios?
      • A, B, and C
      • B and C
      • B and D
      • C and D
   2. Calculate the standard deviation for a portfolio consisting of stocks B and C, assuming the following weights: (1) 40 percent in B and 60 percent in C and (2) 40 percent in C and 60 percent in B.
   3. Which portfolio(s) in part a would an investor prefer?