Question: . What is the expected return and standard deviation of a portfolio comprised of $4,000 in stock M and $6,000 in stock N and covariance

. What is the expected return and standard deviation of a portfolio comprised of $4,000 in stock M and $6,000 in stock N and covariance of M and N is 15%?

State of Economy Probability of State of Economy Returns if State Occurs

Stock M Stock N

Boom 10% 18% 10%

Normal 75% 7% 8%

Recession 15% -20% 6%

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