Question: Question II (15 points) Ms. Clark is considering two securities, A and B, and the relevant information is given below: State of Economy Probability Return

Question II (15 points) Ms. Clark is considering two securities, A

Question II (15 points) Ms. Clark is considering two securities, A and B, and the relevant information is given below: State of Economy Probability Return on Stock A (%) Return on Stock B (%) Bear 0.6 3.0 6.5 Bull 0.4 15.0 6.5 (a) (a) Calculate the expected returns and standard deviations of Security A and B. (b) Suppose Ms. Clark invested $2,500 in Security A and $3,500 in security B. Calculate the expected return and standard deviation of her portfolio

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