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Based on the following information: State of economy Return on stock A Return on stock B Bear 0.112 0.055 Normal 0.105 0.158 Bull 0.083 0.243
Based on the following information:
State of economy | Return on stock A | Return on stock B |
Bear | 0.112 | 0.055 |
Normal | 0.105 | 0.158 |
Bull | 0.083 | 0.243 |
Assume each state of the economy is equally likely to happen.
What is the covariance between the returns of the two stocks? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round the final answer to 6 decimal places.)
Covariance
What is the correlation between the returns of the two stocks? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round the final answer to 4 decimal places.)
Correlation
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