Expected Return, Variance and Standard Deviation

1. Using the table below, calculate the expected return, variance and standard deviation of the portfolio

Demand for Company Products	Probability of this Demand Occurring	Rate of Return if this demand Occurs (k)
Weak	0.1	-20%
Below average	0.1	-10%
Average	0.4	15%
Above Average	0.2	25%
Strong	0.2	45%

2. Two securities have the following characteristics:

	Security A	Security B
Expected Return	25%	15%
Standard Deviation	35%	47%
Beta	0.9	-0.25
Correlation	0.7
Proportion	35%	65%

Furthermore, the correlation of returns between the securities is 0.7. Determine the risk (standard deviation) of the portfolio consisting of equal proportions of Securities A and B