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Consider the following table: Scenario Probability Stock Fund Rate of Return Bond Fund Rate of Return Severe Recession 0.05 -34% -9% Mild Recession 0.25 -20%
Consider the following table:
Scenario Probability Stock Fund Rate of Return Bond Fund Rate of Return Severe Recession 0.05 -34% -9% Mild Recession 0.25 -20% 5% Normal Growth 0.40 21% 9% Boom 0.30 36% 6% Calculate the values of mean return and variance for the stock fund. _____ Calculate the value of the covariance between the stock and bond funds. _____
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