Consider the following table:
Stock Fund | Bond Fund | ||
Scenario | Probability | Rate of Return | Rate of Return |
Severe recession | 0.05 | −38% | −8% |
Mild recession | 0.15 | −10.0% | 5% |
Normal growth | 0.30 | 15% | 6% |
Boom | 0.50 | 25% | −4% |
a. Calculate the values of mean return and
variance for the stock fund. (Do not round intermediate
calculations. Round "Mean return" value to 1 decimal place and
"Variance" to 4 decimal places.)
b. Calculate the value of the covariance between
the stock and bond funds. (Negative value should be
indicated by a minus sign. Do not round intermediate calculations.
Round your answer to 4 decimal places.)
a. Mean of return of stock fund= 13.6%
mean of return of Bond fund= 0.15%
Variance of stock fund= 282.54%
Variance of Bond fund= 25.73%
b. Covariance of stock fund and Bond fund= -17.34%
Consider the following table: Stock Fund Bond Fund Scenario Probability Rate of Return Rate of Return...
Consider the following table: Stock Fund Bond Fund Rate of Return Scenario Severe recession Probability Rate of Return 0.10 -43% -12% Mild recession 0.20 -17% 17% 12% Normal growth 0.30 6% 31% Boom 0.40 4% a. Calculate the values of mean return and variance for the stock fund. (Do not round interr Round "Mean return" value to 1 decimal place and "Variance" to 4 decimal places.) 06 Mean return %-Squared Variance b. Calculate the value of the covariance between the...
Consider the following table: Stock Fund Bond Fund Scenario Probability Rate of Return Rate of Return Severe recession 0.05 −30% −8% Mild recession 0.20 −15.0% 8% Normal growth 0.30 9% 4% Boom 0.45 38% 6% a. Calculate the values of mean return and variance for the stock fund. (Do not round intermediate calculations. Round "Mean return" value to 1 decimal place and "Variance" to 4 decimal places.) b. Calculate the value of the covariance between the stock and bond funds....
Consider the following table: Stock Fund Bond Fund Scenario Probability Rate of Return Rate of Return Severe recession 0.10 −43% −12% Mild recession 0.20 −17.0% 12% Normal growth 0.30 17% 6% Boom 0.40 31% 4% a. Calculate the values of mean return and variance for the stock fund. (Do not round intermediate calculations. Round "Mean return" value to 1 decimal place and "Variance" to 4 decimal places.) b. Calculate the value of the covariance between the stock and bond funds....
Consider the following table: Stock Fund Bond Fund Scenario Probability Rate of Return Rate of Return Severe recession 0.10 −43% −12% Mild recession 0.20 −17.0% 12% Normal growth 0.30 17% 6% Boom 0.40 31% 4% a. Calculate the values of mean return and variance for the stock fund. (Do not round intermediate calculations. Round "Mean return" value to 1 decimal place and "Variance" to 4 decimal places.) b.Calculate the value of the covariance between the stock and bond funds. (Negative...
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