Question 40 (3 points) Stock Fund Bond Fund Scenario Prob. Return Return Recession 0.2 -10% -7% Normal growth 0.5 8% 8% Boom 0.3 20% 4% The covariance between the returns of stocks and bond funds is_ 1+R 1+i Arithmetic average = 24, Geometric average-[(1 + ) (1 + r)... (1 + r)]R-1 1+r = E()-2-p(s)r(s) Variance(t) = 2-1p(s)[(r(s) - E(r)] of = Bf on to(1) Coverte Cov(si, 1) = E-1P(s)[n($) - E(r)][(s) - E(7)] Pija Sharpe ratio S = E(Tp)--; 0.0 op A) 104.36%2 B) 80.36% C) 39.61%2 D) 130.36%2 Screenshot