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Consider the following table: Stock Fund Bond Fund Scenario Probability Rate of Return Rate of Return Severe recession 0.05 44% 13% Mild recession 0.25 16%

Consider the following table:



Stock FundBond Fund
ScenarioProbabilityRate of ReturnRate of Return
Severe recession0.0544%13%
Mild recession0.2516%11%
Normal growth0.4010%4%
Boom0.3030%3%

a. Calculate the values of mean return and variance for the stock fund.
Mean return%
Variance%-Squared

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

Covariance             %-Squared

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