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Consider the performance of a stock fund and a bond fund, based on the state of the economy.
State of Economy Probability Stock Fund: Rate of Return Bond Fund: Rate of Return
Boom 0.2500 0.4500 0.0500
Normal Growth 0.4500 0.1300 0.0700
Recession 0.2750 -0.1500 0.0750
Severe Recession 0.0250 -0.4000 -0.0500
Required:
Using the information in the table above, first calculate the mean, variance, and standard deviation of the stock and bond funds. Then discover the covariance and correlation between these two funds.
(Use cells A5 to D8 from the given information )
Measurement Stock Fund Bond Fund
Mean 11.98% 6.34%
Variance 0.0000 0.0000
Standard Deviation
Covariance (Stock and Bond Funds) Correlation

Can answer it with explain with the equation. i Answered the Mean and the varience

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