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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 Fund Rate of Return -39% -19% 16%
Consider the following table: Scenario Severe recession Mild recession Normal growth Boom Probability 0.10 0.20 0.35 0.35 Stock Fund Rate of Return -39% -19% 16% 30% Bond Fund Rate of Return -8% 8% 5% -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 4 decimal places.) Mean return % 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 4 decimal places.) Covariance %-Squared
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