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Consider the following table: Scenario Severe recession Mild recession Normal growth Boom Probability 0.10 0.20 0.35 0.35 Stock Pund Rate of Return -188 -4.00 238

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Consider the following table: Scenario Severe recession Mild recession Normal growth Boom Probability 0.10 0.20 0.35 0.35 Stock Pund Rate of Return -188 -4.00 238 438 Bond Fund Rate of Return -88 120 100 30 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.) Answer is complete but not entirely correct. Mean return 20.5 % Variance 21.1577 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.) Answer is complete but not entirely correct. 0.0438 Squared Covariance

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