12 pts) The Grunewald Company has developed the following data regarding the rates of return on a potential stock and the market: State of the Economy Probability of Each Rates of Return If State occurs _________________ State Occurring Stock A Market Deep Recession .20 (20%) (30%) Mild recession .20 10 5 Average .20 15 20 Mild boom .20 20 25 Strong boom .20 25 30

a. Calculate the correlation between stock A and the market

. b. Calculate the probability that stock As return is lower than negative 8%, that is P (K<-8%))=?

c. Calculate the probability that stock As return is between -8% and 15%, that is P (-8%