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Consider the following table: Severe recession Mild recession Normal growth Boom Scenario Mean return Variance Covariance Stock Fund Probability Rate of Return 0.10 0.20 0.40
Consider the following table: Severe recession Mild recession Normal growth Boom Scenario Mean return Variance Covariance Stock Fund Probability Rate of Return 0.10 0.20 0.40 0.30 % -35% -15% 20% 25% Required: 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.) Bond Fund Rate of Return -14% 20% 138 -10% 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.)
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