Question: Show all calculation, specially for part C (20 points) Consider the following information Rate of Return if State Occurs State of EconomyProbability of Stock A

Show all calculation, specially for part C

(20 points) Consider the following information Rate of Return if State Occurs State of EconomyProbability of Stock A Stock B Recession Normal Boom State of Econom 0.20 0.60 0.20 0.06 0.07 0.11 -0.20 0.13 0.33 (a) Calculate the Expected Returns for the two stocks (b) Your portfolio is invested 30% in Stock A and 70% in Stock B. what is the expected return of the portfolio? (c) Suppose the risk-free rate is 2% and a diversified market portfolio offers 6% return. Calculate the betas for the stocks (d) What is the portfolio beta? 4

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