ANSWER QUESTION 5: the standard deviation of asset A is 8.6% and 8.04% for B. the correlation coefficient between A and B is 0.94

Use the following information to answer question 1--7. Suppose there are three potential states of the economy for next year: good, normal, and bad. Each state has equal probability to occur, that is, the probability is 1/3 for all of them. Returns of asset A and B in each state are given in the following table. Find out the expected return of asset A and asset B. 20% for A and 15% for B 8% for both A and B 10% for A and 8% for B 9% for A and 7% for B 5% for A and 6% for B Find out the standard deviation of a portfolio with equal weight invested in A and B. 8.32% 6.89% 8.20% 8.04% 8.6% Use the following information to answer question 1--7. Suppose there are three potential states of the economy for next year: good, normal, and bad. Each state has equal probability to occur, that is, the probability is 1/3 for all of them. Returns of asset A and B in each state are given in the following table. Find out the expected return of asset A and asset B. 20% for A and 15% for B 8% for both A and B 10% for A and 8% for B 9% for A and 7% for B 5% for A and 6% for B Find out the standard deviation of a portfolio with equal weight invested in A and B. 8.32% 6.89% 8.20% 8.04% 8.6%