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Consider the following table Probability 0.10 0.15 0.35 0.40 Stock Fund Rate of Return -37% -13% 19% 26% Bond Fund Rate of Return -14% 10%
Consider the following table Probability 0.10 0.15 0.35 0.40 Stock Fund Rate of Return -37% -13% 19% 26% Bond Fund Rate of Return -14% 10% 6% -3% Scenario Severe recession Mild recession Normal growth Boom a. Calculate the values of mean return and variance for the stock fund. (Do not round intermediate calculations. Round "Mean return" value to 1 decimal place and "Variance" to 4 decimal places.) Mean return 90-Squared Variance b. Calculate the value of the covariance between the stock and bond funds. (Negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 4 decimal places.) Covariance %-Squared
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