la. Economy Recession Below Average Average Above Average Boom Probability 0.2 0.1 0.4 0.1 0.2 A -20% -10% -4% 30% 60% Perceived Return B 70% 40% 15% -30% -40% 30% -45% 20% -18% 10% Based on the above table, please make decisions on the following questions: (Please show all your workings.) a. Which asset would you choose as a stand-alone investment? Why? (6 points) b. If a portfolio is formed with the three stocks (A:20%, B: 50% and C:30%). comment on the risk-reduction effect on this portfolio. (6 points) 1b. How can we determine the efficiency of a financial market? (12 points)