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Consider the following table: Scenario Probability Stock Fund Rate of Return Bond Fund Rate of Return Severe recession 0.05 30% 8% Mild recession 0.20 15.0%

Consider the following table:

Scenario Probability Stock Fund Rate of Return Bond Fund Rate of Return
Severe recession 0.05 30% 8%
Mild recession 0.20 15.0% 8%
Normal growth 0.30 9% 4%
Boom 0.45 38% 6%

Required:

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.)

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.)

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