Question: See the table below: Year Probability A B C D Very Poor 0.20 -10% 30% -25% 15% Poor 0.10 0 20 -5 10 Average 0.20

See the table below:

Year	Probability	A	B	C	D
Very Poor	0.20	-10%	30%	-25%	15%
Poor	0.10	0	20	-5	10
Average	0.20	10	10	15	0
Good	0.40	20	0	35	25
Very Good	0.10	30	-10	55	35

Construct an equal-weighted (50/50) portfolio of investments B and C. What are the expected rate of return and standard deviation of the portfolio? Explain your results.

Construct an equal-weighted (50/50) portfolio of investments B and D. What are the expected rate of return and standard deviation of the portfolio? Explain your results.

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