Question
Consider the following table: Scenario Probability StockRate of ReturnRate Bond Fund Rate of Return Severe recession 0.10 44% 11% Mild recessionn 0.20 24% 17% Normal
Consider the following table:
Scenario Probability StockRate of ReturnRate Bond Fund Rate of Return
Severe recession 0.10 44% 11%
Mild recessionn 0.20 24% 17%
Normal growth 0.40 29% 10%
Boom 0.30 34% 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 2 decimal places.)
Mean return 12.60%
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 2 decimal places.)
Covariance________%-Squared
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