Consider the following two stocks.

	Probabilities (pipi )	Stock "a"	Stock "b"
Recession	p1=p1= 35%	-3%	9%
Normal	p2=p2= 25%	5%	-12%
Boom	p3=p3= 40%	17%	26%

What is the expected return of each stock? Enter your answers as a percentage rounded to 2 decimal places. Do not enter the percentage sign in your answer.

ra=ra= Correct response: 70.01

rb=rb= Correct response: 10.550.01

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This question has 4 parts (i.e., you will be clicking "Verify" 4 times)

Using the correct answers from the previous question, what is the standard deviation of each stock? Enter your answer as a percentage rounded to 2 decimal places. Do not enter the percentage sign in your answer.

SDa=SDa= Correct response: 8.720.01

SDb=SDb= Correct response: 14.950.01

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Using the correct answers from the previous question, what is the covariance between the two stocks? Enter your answer rounded to 2 decimal places.

Cov(a,b)=Cova,b=