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Given the returns for two stocks with the following information, calculate the covariance of the returns for the two stocks. Probability Return Stock 1 Return
Given the returns for two stocks with the following information, calculate the covariance of the returns for the two stocks.
Probability | Return Stock 1 | Return Stock 2 | ||
E(R) 1 | ||||
0.4 | 9% | 11% | E(R) 2 | |
0.5 | 11% | 8% | Cov(R1,R2) | |
0.1 | 17% | 13% |
What is
Covariance |
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