Scenario Probability X return rate Y return rate

Boom 25% 15% 10%

Normal 60% 10% 9%

Recession 15% 5% 10%

1. Calculate the expected return and standard deviation of returns of each stock.

2. Calculate the expected return and standard deviation of return for a portfolio with an investment of $6,000 (60%) in stock X and $4,000 (40%) in stock Y. In order to do so, you need to calculate the variance and standard deviation of each stock and the covariance of returns between stock X and stock Y.

Thank you!!