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Please provide detailed answer to part (B) b. Calculate the value of the covariance between the stock and bond funds. (Negative value should be indicated
Please provide detailed answer to part (B)
b. Calculate the value of the covariance between the stock and bond funds. (Negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.)
Consider the following table: Scenario Severe recession Mild recession Normal growth Boom Probability 0.05 0.25 0.40 0.30 Stock Fund Rate of Return -31% -11% 16% 21% Bond Fund Rate of Return -10% 16% 9% -6% a. Calculate the values of mean return and variance for the stock fund. (Do not round intermediate calculations. Round "Mean return" value to 1 decimal place and "Variance" to 2 decimal places.) Mean return 8.40 % Variance 242.44 %-Squared b. Calculate the value of the covariance between the stock and bond funds. (Negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.) Covariance %-SquaredStep by Step Solution
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