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3. Calculate the COVARIANCE for the following stocks: Probability Return Stock A Return Stock B 20% 40% 30% 10% 7% 5% 7% 15% 9% 6%

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3. Calculate the COVARIANCE for the following stocks: Probability Return Stock A Return Stock B 20% 40% 30% 10% 7% 5% 7% 15% 9% 6% 4% 6% 4. Define in your own words the term correlation coefficient and write out the equation used to calculate this coefficient for a 2 stock portfolio. (formula includes the Covariance for the 2 stocks in question). B) CALCULATE the correlation coefficient for the stocks in problem 3

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