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scenario prob. stock fund rate of return % bond fund rate of return % severe recession .05 -29 -14 mild recession .25 -9 20 normal

scenario prob. stock fund rate of return % bond fund rate of return %
severe recession .05 -29 -14
mild recession .25 -9 20
normal growth .4 14 13
boom .3 19 -10

Consider the following table: Stock Fund Bond Fund Scenario Probability Rate of Return Rate of Return Severe recession 0.05 29 % 14 % Mild recession 0.25 9 % 20 % Normal growth 0.40 14 % 13 % Boom 0.30 19 % 10 %

a.Calculate the values of mean return and variance for the stock fund. (Do not round intermediate calculations. Round "Mean return" value to 1 decimal place and "Variance" to 2 decimal places.)

b.Calculate the value of the covariance between the stock and bond funds.

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