A JPMorgan analyst is making decisions on a client’s portfolio and is given the following information about two stocks, Winslow and Retrograde. 

State	Probability	Winslow Returns (%)	Retrograde Returns (%)
Deep Recession	0.01	-16.4	36.9
Moderate Recession	0.04	-12.4	27.4
Mild Recession	0.10	-6.0	18.6
No Change	0.15	2.2	13.8
Mild Growth	0.25	8.1	10.4
Moderate Growth	0.30	14.3	5.6
High Growth	0.15	24.1	-4.5

a What is the expected return and standard deviation of Winslow and Retrograde stock?  

b Create a 50/50 portfolio (50% of money in Winslow and 50% in Retrograde).  What are the expected return and standard deviation of the portfolio?  Compare the standard deviation of the 50/50 portfolio to that of Winslow and Retrograde.  Explain what drives the results.