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Consider the following two stocks. Probabilities (Pi) Stock "A" Stock "B" Recession P1 = 38% -3% 18% Normal P2 = 26% 17% |-11% Boom P3 = 36% 18% 27% The portfolio weights for stocks "A" and "B" are 0.2 and 0.8, respectively. What are the expected returns of stock "A" and "B"? Enter your answers as a percentage. Do not put the percent sign in your answers. Round your answers to 2 DECIMAL PLACES. E(ra) = 7.16 Correct response: 7.1610.01 F(b) = 9.9 Correct response: 9.910.01 Click "Verify" to proceed to the next part of the question. This questions has 4 parts (i.e., you will be clicking "Verify" 4 times) What are the standard deviations of stocks "A" and "B"? Enter your answers as a percentage. Do not put the percent sign in your answers. Round your answers to 2 DECIMAL PLACES. SDa= 9.03 Correct response: 9.03+0.01 SD 14.84 Correct response: 14.84+0.01 Click "Verify" to proceed to the next part of the question. What is the expected return of the portfolio? Enter your answer as a percentage. Do not put the percent sign in your answer. Round your answer to 2 DECIMAL PLACES E (Tp) 9.35 Correct response: 9.35+0.01 Click "Verify" to proceed to the next part of the question. Using the correct answer from the previous question, what is the standard deviation of the portfolio? Enter your answer as a percentage. Do not put the percentage sign in your answer. Round your answer to 2 DECIMAL PLACES. SDp = Number Click "Verify" to proceed. Section Attempt 1 of 1 Verify

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