1. The universe of available securities includes two risky stock funds, A and B, and T-bills. The data are as follows: Expected Return A 10% B 15% T-bills 4% Standard Deviation 15% 25% 0 The correlation coefficient between A and B =0.4. 1) What is the covariance between funds A and B? Covariance (X, Y) = (x-E(X))(y-Ey) Prob x,y) N M t=1 Covariance (X, Y) =Pxy xoy