Consider a 3-case scenario analysis for a stock and a bond. What is the covariance for the stock return and bond return? (Note: use decimals for probabilities and whole numbers for returns in your calculations; i.e., multiplying a 30% probability by an 8% return will look like 0.30*8.)

a. 3.76

b. -84.4

c. -396.8

d. -137.6

HWIII Q3 - Image \begin{tabular}{rrr} Prob(scenario) & Stock return & Bond return \\ 30% & -12 & 8 \\ 50% & 5 & 8 \\ 20% & 25 & -12 \end{tabular}