Consider the following table Scenario Probability Stock Fund Rate of Return Bond Fund Rate of Return Severe recession 0 15 34 10 Mild recession 0 20 18 5 6 Normal growth 0 35 14 7 Boom 0 30 24 3 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 )

Question

Consider the following table  Scenario Probability Stock Fund Rate of Return Bond Fund Rate of Return Severe recession 0 15 34  10  Mild recession 0 20 18 5  6  Normal growth 0 35 14  7  Boom 0 30 24  3  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 )

Accepted Answer

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Scenario	Probability	Stock Fund Rate of Return	Bond Fund Rate of Return
Severe recession	0.15	34%	10%
Mild recession	0.20	18.5%	6%
Normal growth	0.35	14%	7%
Boom	0.30	24%	3%

Question

Consider the following table: Scenario Probability Stock Fund Rate of Return Bond Fund Rate of Return Severe recession 0.15 34% 10% Mild recession 0.20 18.5%

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