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Problem 3(3 points): Assume the probability distribution of the rate of return on two stocks Best and SugarKane are as follows Bullish Stock Bearish Stock
Problem 3(3 points): Assume the probability distribution of the rate of return on two stocks "Best" and "SugarKane" are as follows Bullish Stock Bearish Stock Market Best Sugar Crisis Probabilit Rate of Return Market .3 -5% .2 20% 10% Bullish Stock Market Bearish Stock Market SugarKane Sugar Crisis Probabilit Rate of Return .2 -25% 25% 10% a)What is the covariance between Best and SugarKane? b) If your portfolio is half Best stock and half SugarKane, what are your expected return and standard deviation
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