Question $(10$ marks$)$

You are given the following information:

State of Economy

Probability of State of Economy

Initech

Rate of Return

Globex

Rate of Return

Market

Rate of Return

Recession

$0\mathrm{.}2$

$6$

$-25$

$5$

Normal

$0\mathrm{.}55$

$40$

$12$

$15$

Boom

$0\mathrm{.}25$

$24$

$60$

$28$

The expected return for Initech is Answer $1$ Question $21$

$\%$ whereas that for Globex is Answer $2$ Question $21$

$\%($round off your final answers to one decimal place$).$

The variance for Initech is Answer $3$ Question $21$

whereas that for Globex is Answer $4$ Question $21$

$($round off your final answers to two decimal places$).$

Answer $5$ Question $21$

has the most total risk of Answer $6$ Question $21$

$\%($round off your final answers to two decimal places$).$

The correlation coefficient for Globex and the market $(\backslash$rho $($N$,$ M$))$ is Answer $7$ Question $21$

and that of Initech and the market $(\backslash$rho $($M$,$M$))$ is Answer $8$ Question $21$

$($round off your final answers to two decimal places$).$