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Consider the following table: Scenario Severe recession Mild recession Normal growth Boom Required: Stock Fund Bond Fund Probability 0.05 Rate of Return -30% Rate
Consider the following table: Scenario Severe recession Mild recession Normal growth Boom Required: Stock Fund Bond Fund Probability 0.05 Rate of Return -30% Rate of Return -9% 0.25 -10% 15% 0.40 15% 8% 0.30 20% -5% 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 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 2 decimal places.) Covariance
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