Question

Consider the following table:     Stock Fund Bond Fund Scenario Probability Rate of Return Rate of...

Consider the following table:

   

Stock Fund Bond Fund
Scenario Probability Rate of Return Rate of Return
Severe recession 0.08 −36% −23%
Mild recession 0.34 −6% 1%
Normal growth 0.45 16% 5%
Boom 0.13 40% 5%


a. Calculate the values of mean return and variance for the stock fund. (Do not round intermediate calculations. Round "Mean return" value to 2 decimal places and "Variance" to 4 decimal places.)  

Mean return %
Variance


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.)

Covariance             

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