Question: PLEASE ANSWER ONLY THE HIGHLIGHTED QUESTION! 6. The returns on shares of Laverne Corporation and Shirley Corporation are predicted under the following various economic conditions:

PLEASE ANSWER ONLY THE HIGHLIGHTED QUESTION! 6. The returns on shares

PLEASE ANSWER ONLY THE HIGHLIGHTED QUESTION!

6. The returns on shares of Laverne Corporation and Shirley Corporation are predicted under the following various economic conditions: State of Economy Return on Laverne Return on Shirley Recession -20% -30% Stagnant +0% -5% Moderate Growth +10% +10% Boom +30% +65% Each economic state has a 25% probability of occurring. a. What are the expected returns of each stock? b. What are the variances of each stock? c. What are the standard deviations of each stock? d. Also solve the problem for a portfolio of both stocks, with 25% invested in Laverne and 75% invested in Shirley

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