Question: Using the probability distribution shown below, calculate the expected risk and return estimates of each stock and of a portfolio comprised of 40% of Stock

Using the probability shown below, calculate the expected risk and return estimates of each stock and of a comprised of 40% of Stock A and 60% of StockB.

State of Stock A's State occurringConditional return Conditional return -12% 1490 2590 Probability of Stock B's Economv Recession Normal Boom 0.3 0.5 0.2 20% 12% -10%

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