Problem 1 (45 marks) You have done your research for the following investments and your friend has provided their expectations for the markets for next year. Probability of State of State of Stock Stock Economy Economy A B TSX Boom .30 30% -9% 18% Normal .40 16% 12% 10% Recession .30 -10% 20% -10% * Remember to show all of your work i. Calculate the covariance and correlation of the returns for stock B and the TSX. (2 marks) j. Calculate the beta of Stock A. (2 marks) k. Calculate the beta of stock B. (2 marks) I. Calculate the beta for the TSX. (2 marks)