I need help with question 19 and 20 in the following copy paste:

This information pertains to the following 4 questions

Consider two stocks Alpha and Kappa below. Assume that both stocks have the same return

volatility and the following possible returns for next year:

Returns

State

Pr

Alpha Kappa

Boom

0.25

15%

8%

Normal

0.50

8%

2%

Recession 0.25

-2%

12%

17. Compute the expected returns of Alpha and Kappa, respectively:

(A) 6.0%; 7.0%

(B) 7.0%; 7.3%

(C) 7.3%; 6.0%

(D) 6.2%; 7.7%

5

18. The volatility of Alpha is closest to:

(A) 6.1%

(B) 6.6%

(C) 7.2%

(D) 7.7%

19. Compute the covariance between Alpha and Kappa:

(A) 0.00115

(B) 0.00171

(C) -0.00171

(D) -0.00115

20. Assume (correctly or incorrectly) that Alpha and Kappa have volatility of 6% and 4%

respectively, and correlation

0

:

5. Compute the volatility of portfolio

R

P

that invests

90% in Alpha and 10% in Kappa:

(A) 4.8%

(B) 5.2%

(C) 5.4%

(D) 5.8%

Namely, I'm not sure how to calculate covariance using the data I'm given, is there a way to compute it given that I already have the expected returns and volatility (variance) from questions 17 and 18? Thanks in advance!!