1. Your answer should show at least the first 3 rounded non-zero digits followed by zeros.

A)For Example:If the answer is 278,915, the first 3 rounded non-zero digits is 279 and an answer of 279,000 is acceptable. An answer of 278,915 is also acceptable.

B)Another Example: Suppose the answer is 0.08297, then an answer of 0.083 is acceptable. 0.0830 and 0.08297 are also acceptable.

2. Do not use currency signs. Suppose the answer is $40.42, then you should answer 40.4 or 40.42.

3.Do not use (...) to show negative quantities. If the answer is -0.5192, then do not answer (0.519), rather answer -0.519 or -0.5192.

4. When you have a question that may be answered as a percentage, answer it instead as a decimal. For example, if the answer for a rate of return is 10.5%, then enter the answer as 0.105 instead of 10.5 or 10.5%.Basically answer the question as the actual number instead of answering it as a percentage.

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#1 Given the returns and probabilities for the three possible states listed here, calculate the covariance between the returns of Stock A and Stock B. For convenience, assume that the expected returns of Stock A and Stock B are 0.10and0.19, respectively. (Round your answer to 4 decimal places. For example .1244)

Probability Return (A) Return (B)

Good 0.35 0.30 0.50

OK 0.50 0.10 0.10

Poor 0.15 -0.25 -0.30

#2 In order to fund her retirement, Michele requires a portfolio with an expected return of0.10 per year over the next 30 years. She has decided to invest in Stocks 1, 2, and 3, with 25 percent in Stock 1, 50 percent in Stock 2, and 25 percent in Stock 3. If Stocks 1 and 2 have expected returns of0.09 and0.09 per year, respectively, then what is the minimum expected annual return for Stock 3 that will enable Michele to achieve her investment requirement?

3) Lee purchased a stock one year ago for $28. The stock is now worth $30, andthe total return to Lee for owning the stock was0.35. What is thedollar amount of dividends that he received for owning the stock during theyear?

4) The beta of M Simon Inc., stock is 1.3, whereas the risk-free rate of returnis0.10. If the expected return on the market is0.15, then what isthe expected return on M Simon Inc?

5)London purchased a piece of real estate last year for $83,000. The real estateis now worth $102,000. If London needs to have a total return of0.24 during the year, then what is the dollar amount of income that she needed tohave to reach her objective?

6) The risk-free rate of return is currently0.04, whereas the market risk premium is0.06. If the beta of RKP, Inc., stock is 1.6, then what is the expected return on RKP?