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Consider the following table: Scenario Severe recession Mild recession Normal growth Boom Probability 0.04 0.23 0.61 0.12 Stock Fund Rate of Return -34% -14% 9%
Consider the following table: Scenario Severe recession Mild recession Normal growth Boom Probability 0.04 0.23 0.61 0.12 Stock Fund Rate of Return -34% -14% 9% 44% Bond Fund Rate of Return -20% -6% 2% 3% a. Calculate the values of mean return and variance for the stock fund. (Do not round intermediate calculations. Round "Mean return" value to 2 decimal places and "Variance" to 4 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 4 decimal places.) Covariance
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