Using the following information, find the Expected Return, Variance, and Standard Deviation for the returns on Stock 1 and Stock 2. Also, find the Covariance and Correlation Coefficient between the returns on Stocks 1 and 2. If you invest $10,000 in stock X and $25,000 in stock Y, what would be the expected return and risk on your portfolio?
| States |
Probability |
Return on
StockX |
Return on
StockY |
| A |
10% |
15% |
25% |
| B |
25% |
15% |
20% |
| C |
30% |
17% |
12% |
| D |
35% |
20% |
10% |