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hi, can you please help me with nunber 5. please!!! Consider the returns of a small firm and a large firm in 5 different economic
hi, can you please help me with nunber 5. please!!!
Consider the returns of a small firm and a large firm in 5 different economic scenarios: 1) a major negative shock to their supply chain with probability 101;2 ) a minor negative shock to their supply chain with probability 513 ) no disruptions to either supply or demand with probability 524 ) a minor positive shock to demand with probability 51; and 5) a major positive shock to demand with probability 101. Let the random variable X represent the distribution of the returns of the small firm, and the random variable Y represent the distribution of the returns of the large firm. (See Table 3 below.) Table 3: Firms and economic uncertainty 1. Calculate the expected value and variance for the small and large firm. 2. Calculate the covariance and correlation between the small and large firm. 3. Find E(3X5Y) and Var(3X5Y). 4. Find Cov(3X,5Y) and Corr(3X,5Y). 5. Consider a third random variable Z with E(Z)=3,Var(Z)=5,Cov(X,Z)=2, and Cov(Y,Z)=4. Find Cov(3X,2Z5Y) and Corr(3X,2Z5Y) Step by Step Solution
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