Question: Hello I need some help with this finance problem. thank you! Stock A is expected to produce the following returns given the various states of

Stock A is expected to produce the following returns given the various

Hello I need some help with this finance problem. thank you!

states of the economy: State of Economy Recession Normal Boom Probability of

Stock A is expected to produce the following returns given the various states of the economy: State of Economy Recession Normal Boom Probability of State of Eeonomv .05 .70 .25 Rate of Return .02 .09 1) What is the expected return on this stock? 2) What is the standard deviation of the expected return of this stock? 3) If an investor is considering combining stock A with another stock to build a portfolio, which one of the two (Stock B or Stock C) is a better choice with the given information, why? Stock B has an expected return of 20%, standard deviation of 15% and has a correlation coefficient with A of 0.7. Stock C has an expected return of 18%, standard deviation of 12% and has a correlation coefficient with A of -0.5. You are expected to give a suggestion quickly without doing calculations.

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