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Consider the following table: Stock Fund Bond Fund Scenario Probability Rate of Return Rate of Return Severe recession 0.15 ?34% ?10% Mild recession 0.20 ?18%

Consider the following table:

Stock Fund

Bond Fund

Scenario

Probability

Rate of Return

Rate of Return

Severe recession

0.15

?34%

?10%

Mild recession

0.20

?18%

6%

Normal growth

0.35

14%

7%

Boom

0.30

24%

?3%

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 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.)

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