Question
Based on the following information: State of Economy Probability of State of Economy Return on Stock J Return on Stock K Bear .23 .013 .041
Based on the following information: |
State of Economy | Probability of State of Economy | Return on Stock J | Return on Stock K |
Bear | .23 | .013 | .041 |
Normal | .58 | .145 | .069 |
Bull | .19 | .225 | .099 |
Calculate the expected return for each of the stocks. (Do not round intermediate calculations and round your answers to 2 decimal places. (e.g., 32.16)) |
Expected return | |
Stock J | % |
Stock K | % |
Calculate the standard deviation for each of the stocks. (Do not round intermediate calculations and round your answers to 2 decimal places. (e.g., 32.16)) |
Standard deviation | |
Stock J | % |
Stock K | % |
What is the covariance between the returns of the two stocks? (Do not round intermediate calculations and round your answer to 6 decimal places. (e.g., 32.161616)) |
Covariance |
What is the correlation between the returns of the two stocks? (Do not round intermediate calculations and round your answer to 4decimal places. (e.g., 32.1616)) |
Correlation |
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