Consider two risky assets: a stock fund and a bond fund with the following probability distributions.

Scenario Probability Stock Return (%) Bond return (%)

Severe recession 0.05 -40 -9

Mild recession 0.25 -14 15

Normal growth 0.40 17 8

Boom 0.30 33 -5

a.What is the expected return for the bond fund? Your answer should be in percentage points and accurate to the hundredth?

b.What is the standard deviation of the bond fund?

c. What is the correlation coefficient between the stock returns and the bond returns?