Question 26.6 Create a new PDF document if you choose to answer this question, put your Student ID at the top of each page of the document. Parta) Consider the following: Probability State of of state of economy economy (p) Boom 25% Normal 50% Recession 25% Variance (A2) Standard deviation (A) Rate of return if state occurs Equity A Equity B 30% 8% 15% 12% -5% 18% 0.015469 12.44% A portfolio is invested 60 per cent in Equity A and 40 per cent in Equity B. Required: i. Calculate the expected return for Equity A, E(RA), and Equity B, E(RB). Explain your workings. 10 marks ii. Calculate the variance (OB2) and the standard deviation (CB) for Equity B. Explain your workings. 20 marks iii. Calculate the expected return of a portfolio, E(Rp) invested 60 per cent in Equity A and 40 per cent in Equity B. Explain your workings. 10 marks