You are a junior analyst that is tasked with assessing the performance of a portfolio (portfolio A). You know that returns are impacted by the economic state the country is in so you started the analysis by making the following predictions about the odds of an economic state occurring and the returns in each state.

State of economy	Odds of state occurring	Return in state
Recession	1-4	8%
Normal growth	2-1	14%
Boom	1-1	20%

1. Calculate the probabilities of the country being in each state of the economy.

2. Using the probabilities calculated in a, compute the expected return for this portfolio

3. Calculate the variance and standard deviation of this portfolio. Round off to 2 decimal places

4. A similar portfolio generates a return of 16% and has a standard deviation of 6.25% which portfolio you decide to invest in between A and B