Question: 4. (20 points) You've estimated future returns for two stocks, using economic scenarios. Your predictions are summarized in the table below: Scenario Probability Return on

4. (20 points) You've estimated future returns for two stocks, using economic scenarios. Your predictions are summarized in the table below: Scenario Probability Return on Stock A Stock B Severe recession 20 (.35) (20) Mild recession 30 ,05 .00 Normal growth Boom 30 15 25 .20 55 25 Standard deviation 287 179 Assume you decide to invest 40% of your money in stock A and 60% of your money in stock B. What will be your portfolio's a. Expected return? b. Standard deviation

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