Problem $11-26$ Covariance

Correlation

Based on the following information:

$10$ points

References

$\backslash$table$[[$State of$,\backslash$table$[[$Probability of State Return on$],[$Economy$],[$of Economy$]],\backslash$table$[[$Stock J J$],[$Stock K$]],\backslash$table$[[$Stock$],[$Bear$]]],[$Normal$,\mathrm{.}22,-\mathrm{.}012,\mathrm{.}042],[$Bull$,\mathrm{.}57,\mathrm{.}146,\mathrm{.}070],[,\mathrm{.}21,\mathrm{.}226,\mathrm{.}100]]$

a$.$ Calculate the expected return for each of the stocks. $($Do not roul calculations and enter your answers as a percent rounded to $2$ deci $32\mathrm{.}16.)$

b$.$ Calculate the standard deviation for each of the stocks. $($Do not round calculations and enter your answers as a percent rounded to $2$ decil $32\mathrm{.}16.)$

c$.$ What is the covariance between the returns of the two stocks? $($Do noi intermediate calculations and round your answer to $6$ decimal place

d$.$ What is the correlation between the returns of the two stocks? $($Do not intermediate calculations and round your answer to $4$ decimal place

$\backslash$table$[[$a$.$ Stock J$,12\mathrm{.}80,\%$