Question: PLEASE ANSWER THE C ONLY 3. There are two assets and three states of economy: State of Economy Probability Rate of Return if State Occurs

PLEASE ANSWER THE C ONLY 3. There are two assets and

PLEASE ANSWER THE C ONLY

3. There are two assets and three states of economy: State of Economy Probability Rate of Return if State Occurs Stock A Stock B Recession 0.25 -0.15 0.20 Normal 0.50 0.20 0.30 Boom 0.25 0.60 0.40 Total 1.00 a. What are the expected returns and standard deviations for these two stocks? b. Which stock will you choose? (Consider risk and return)? c. If you put 2 assets in a portfolio with 50% each weighted, what are the expected return portfolio and the risk of portfolio

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