Question: Answer with formula's and not in spreadsheet. a. Consider the following expected returns for two stocks ( ( A ) and ( B ) )

Answer with formula's and not in spreadsheet. a. Consider the following expected

Answer with formula's and not in spreadsheet.

a. Consider the following expected returns for two stocks ( \$ A \$ and \$ B \$ ) in three different states of the economy (Boom, Normal, Crisis), all of which have the equal probabilities. UIRED: i. Calculate the expected return and standard deviation of the two stocks. [12 marks] ii. What is the correlation between stocks \$ A \$ and \$ B \$ ? [6 marks] iii. Calculate the expected return and standard deviation of a portfolio comprising \30 of Stock A and \70 of Stock B. [6 marks]

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