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Consider the following table: Stock Fund Bond Fund Scenario Probability Rate of Return Rate of Return Severe recession 0.05 36% 11% Mild recession 0.20 12%

Consider the following table:

Stock Fund Bond Fund
Scenario Probability Rate of Return Rate of Return
Severe recession 0.05 36% 11%
Mild recession 0.20 12% 13%
Normal growth 0.40 15% 4%
Boom 0.35 32% 5%

1A) Calculate the values of expected return for the stock fund. (Do not round intermediate calculations. Enter your answer as a decimal number round to 3 decimal place.)

1B) Calculate the values of variance for the stock fund. (Do not round intermediate calculations. Enter your answer as a decimal number round to 4 decimal place.)

1C) 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. Enter your answer as a decimal number rounded to 5 decimal places.)

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