Question: To achieve a zero standard deviation for a portfolio, calculate the weights of stock A and stock B, assuming the correlation coefficient is 1. Use

To achieve a zero standard deviation for a portfolio, calculate the weights of stock A and stock B, assuming the correlation coefficient is 1. Use the following information. (Round intermediate calculations and final answers to 2 decimal places, e.g. 31.21%.)

State of the economy

Probability of occurrence

Expected return on stock A in this state

Expected return on stock B in this state

High growth

30% 40.5% 57.5%

Moderate growth

25% 19.5% 27.5%

Recession

45% - 7.5% - 17.5%

Weight of stock A

enter weight of stock A in percentages %

Weight of stock B

enter weight of stock B in percentages %

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