4. Calculate the expected return for each security given the information below: State of the Economy High growth Moderate growth No growth Recession Probability of Occurrence 10% 20% 50% 20% Expected return on A in state 60% 20% 10% -25% Expected return on B in state 5% 25% 5% 0% 5. Estimate the volatility of stocks A and B in question (4) above. 6. What is the expected return on a portfolio that has $600 invested in stock A and $1,400 invested in stock B in question (4) above. 7. Calculate the covariance of returns on stocks A and B in question (4) above. 8. Estimate the volatility of the portfolio in question 6 which has 30% invested in stock A and 70% invested in stock B, using covariance. 9. Repeat question 8 using correlation. 10. Are you risk averse