Question: You have been given this probability distribution for the Expected Return of Stock and Bond Status of economyProbability rate of returnStock returnBond returnRecession 0.25-4.5%-2%Normal growth0.55%4%Boom0.3015%7%

You have been given this probability distribution for the Expected Return of Stock and Bond

Status of economyProbability rate of returnStock returnBond returnRecession 0.25-4.5%-2%Normal growth0.55%4%Boom0.3015%7%

(iv) What is the expected rate of return of stock and bonds?

(v) Compute the standard deviation of stock and bonds returns?

(vi) Compute the coefficient of variation?

(vii) If an investor allocates 60% of asset to stock and remaining to bond, what would be the investor's portfolio returns and standard deviation?

(viii) Is there any diversification benefit achieved?

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