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Problem 6-7 Consider the following table: Scenario Severe recession Miza recession Normal growth Boom Probability 0.10 8.15 0.35 0.40 Stock Fund Rate of Return -322

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Problem 6-7 Consider the following table: Scenario Severe recession Miza recession Normal growth Boom Probability 0.10 8.15 0.35 0.40 Stock Fund Rate of Return -322 - 22.ex 14% 35% Bond Fund Rate of Return -17% 15% 6% a. Calculate the values of mean retum and variance for the stock fund (Do not round Intermediate calculations. Round "Mean return value to 1 decimal place and "Variance" to 4 decimal places.) Mean return Variance %-Squared b. Calculate the value of the covariance between the stock and bord funds (Negative value should be indicated by a minus sign. Do not found intermediate calculations. Round your answer to 4 decimal places.) Covariance Squared

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