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2) The returns to stocks to Toyota and Honda are described in the following table: State of the World 1 2 3 4 5 6
2) The returns to stocks to Toyota and Honda are described in the following table: State of the World 1 2 3 4 5 6 Probabilit Toyot Honda y of a Return Event Return 0.21 0.07 0.02 0.08 -0.04 0.04 0.18 0.05 -0.06 0.10 0.07 0.10 0.19 0.06 -0.02 0.24 0.04 0.14 What is the expected (mean) return for both stocks? The variances? The standard deviations? What is the covariance between the two stocks? What is the correlation
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