Question
Consider the following table: Scenario Probability Stock fund rate of return Bond fund rate of return Severe recession 0.10 -34% -9 5 Mild recession 0.20
Consider the following table:
Scenario Probability Stock fund rate of return Bond fund rate of return
Severe recession 0.10 -34% -9 5
Mild recession 0.20 -20.0% 5%
Normal growth 0.30 21% 9%
Boom 0.40 36% -6%
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 %
variance % - Squared
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 %
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