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2. Consider the following table: Scenario Severe recession Mild recession Normal growth Boom Probability 0.10 0.20 0.40 0.30 Stock Fund Rate of Return -39% -19%

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2. Consider the following table: Scenario Severe recession Mild recession Normal growth Boom Probability 0.10 0.20 0.40 0.30 Stock Fund Rate of Return -39% -19% 24% 29% Bond Fund Rate of Return -12% 18% 11% -8% a.) Calculate the values of mean return and variance for the stock fund. b.) Calculate the value of the covariance between the stock and bond funds

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