3. What is the covariance between AB, BC, and AC ?

4. What is the correlation coefficient for AB, BC, and AC ?

Use the following information/data to answer the next six questions. Assume the following securities A B, and C- and that there are three possible states of nature that could be realized over the next year. Assume that each state has the same probability of occurring and that you have the same amount invested in each security (thus, make sure you use 1/3 (333333333.... as your weight and don't use just 33) NOTE: YOU MUST GET THE RIGHT ANSWER FOR EACH QUESTION BECAUSE SOME OF THE LATTER QUESTIONS PULL FROM WHAT YOU HAVE DERIVED IN THE EARLIER QUESTIONS Security A B C Return (state 1): 10.5% 8.0% 6.0% Return (state 2): 7.5% 7.0% 6.0% Return (state 3): 5.0% 5.5% 6.0% A (Whatarethe expected (um)ore ch oft assets)(S):766#7% 2What are the standard deviations for each of the assets? 596 -162 3What is the covariance between AB, BC, and AC (in this order)? "What is the correlation coefficient for AB, BC, and AC (in this ordr)? 120 What is the overall expected rate of return on the portfolio across all three states? What is the overall expected standard deviation on the portfolio across all three states