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Rate of Return Probability of the state of Economy Stock A Stock B Bull 0.3 13% 4% Bear 0.2 -10% 12% Neutral 0.5 5% 5%
Rate of Return | |||
Probability of the state of Economy | Stock A | Stock B | |
Bull | 0.3 | 13% | 4% |
Bear | 0.2 | -10% | 12% |
Neutral | 0.5 | 5% | 5% |
Given the above table compute the covariance between returns of stock A and Stock B
0.00227 | ||
-0.00227 | ||
-0.0227 | ||
0.227 | ||
0.0227 |
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