Question: Below are the returns for two assets under different states of the economy. State Boom Normal Recession Probability 1/3 1/2 1/6 Asset 1 30% 15%

Below are the returns for two assets under different states of the economy.

State Boom Normal Recession
Probability 1/3 1/2 1/6
Asset 1 30% 15% 0%
Asset 2 12% 9% 6%

Find the expected return and standard deviation of a portfolio made up of 70% asset 1 and 30% asset 2.

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