Question $3(17$ marks$)$

Steven is a financial planner at Morgan Investment Bank. He has just compiled data for the analysis of two assets: Stock S and Portfolio M $($the "market portfolio"$).$ The performances of the two assets under various states of the economy next year are shown in the table below.

$\backslash$table$[[\backslash$table$[[$State of Economy$],[$Next Year$]],\backslash$table$[[$Probability of$],[$State of Economy$]],$Rate of Return if State Occurs$],[$Stock Super $($S$),$Portfolio M $($M$)],[$Boom$,0\mathrm{.}1,9\%,12\%$