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Consider the following table: TT Stock Fund Bond Fund Probability Rate of Return -358 Scenario Rate of Return 0.10 -148 Severe recession Mild recession 0.20
Consider the following table: TT Stock Fund Bond Fund Probability Rate of Return -358 Scenario Rate of Return 0.10 -148 Severe recession Mild recession 0.20 -15% 20% Normal growth 0.40 20% 13% 0.30 25% -10% om a.Calculate the values of mean return and variance for the stock fund. When calculating the variance, use percents, not decimals. For example, if a return is 10%, use the value 10 in your variance calculations, not 0.10. (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. Again, use percents and not decimals for your calculations. That is, for 10% use the value of 10, not 0.10, for all your calculations. (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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