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Consider the following table: Scenario Severe recession Mild recession Normal growth Boom Mean return Variance Probability 0.05 0.25 0.40 0.30 Stock Fund Rate of Return
Consider the following table: Scenario Severe recession Mild recession Normal growth Boom Mean return Variance Probability 0.05 0.25 0.40 0.30 Stock Fund Rate of Return -40% -14% Covariance 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.) 17% 33% % %-Squared Bond Fund Rate of Return -9% 15% 8% -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 2 decimal places.) %-Squared
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