QUESTION 2 Mr Carman, a research analyst with OCB Securities, has forecast the following outcomes for the Stock Butterfly and Stock Caterpillar. State of Economy Probability of state Rate of Return on Rate of Return on of Economy Share Butterfly Share Caterpillar Recession 0.10 -0.20 0.30 Normal 0.60 0.10 0.20 Boom 0.30 0.70 0.50 2a) Determine the expected return for Stock Butterfly and Stock Caterpillar? 2b) Determine the standard deviation for Stock Butterfly and Stock Caterpillar? 2c) Compute the expected return, standard deviation and covarince of the portfolio with assumption, an investor has $200,000, where he invests $60,000 in Stock Butterfly and the remainder in Stock Caterpillar. Interpret the covariance figure