Consider the following table: Stock Fund Bond Fund Scenario Probability Rate of Return Rate of Return Severe
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Question:
Consider the following table:
Stock Fund
Bond Fund
Scenario
Probability
Rate of Return
Rate of Return
Severe recession
0.10
46%
20%
Mild recession
0.20
24%
14%
Normal growth
0.30
8%
5%
Boom
0.40
44%
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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