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Consider the following table: Scenario Severe recession Mild recession Normal growth Boom Mean return Variance Probability 0.10 0.20 0.30 0.40 Covariance 10.6 % 1.0080 %-Squared
Consider the following table: Scenario Severe recession Mild recession Normal growth Boom Mean return Variance Probability 0.10 0.20 0.30 0.40 Covariance 10.6 % 1.0080 %-Squared Stock Fund Rate of Return 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.) -46% -24.0% 8% 44% 0 1380 %-Squared Bond Fund Rate of Return -20% 14% 5% 5% 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.)
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