Question: Consider the following information: State Probability ABC Return XYZ Return Boom 25% 18% 27% Normal 50% 10% 18% Slowdown 10% 8% 6% Recession 15% -2%

Consider the following information: State Probability ABC Return XYZ Return Boom

Consider the following information: State Probability ABC Return XYZ Return Boom 25% 18% 27% Normal 50% 10% 18% Slowdown 10% 8% 6% Recession 15% -2% -12% For both ABC and XYZ, answer the following. Upload the Excel file. 1. What is the expected return of stocks ABC and XYZ? 2. What is the variance of stocks ABC and XYZ? 3. What is the standard deviation of stocks ABC and XYZ? 4. What is the expected return of the portfolio if $8,000 is invested in ABC and $13,000 in XYZ with only these two stocks in the portfolio

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