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Consider the following table: Scenario Probability Stock Fund rate of return Bond fund rate of return Severe Recession .05 -32% -10% Mild Recession .25 -10%
Consider the following table:
Scenario | Probability | Stock Fund rate of return | Bond fund rate of return |
Severe Recession | .05 | -32% | -10% |
Mild Recession | .25 | -10% | 6% |
Normal Growth | .40 | 22% | 10% |
Boom | .30 | 37% | 7% |
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
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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