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Consider the following table Stock Fund Bond Fund Scenario Probability Rate of Return Rate of Return Severe recession 0.05 28% 10% Mild recession 0.25 8%

Consider the following table

Stock Fund Bond Fund
Scenario Probability Rate of Return Rate of Return
Severe recession 0.05 28% 10%
Mild recession 0.25 8% 12%
Normal growth 0.40 4% 2%
Boom 0.30 42% 7%

Calculate the values of mean return and variance for the stock fund.

Mean Return %=

Variance=

Calculate the value of the covariance between the stock and bond funds.

Covariance=

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