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The following are rates of return on stock A, B, and C, as well as the probabilities. Joint Rates of Return Probability B 0.30 0.20
The following are rates of return on stock A, B, and C, as well as the probabilities. Joint Rates of Return Probability B 0.30 0.20 0.15 0.05 0.20 0.15 0.12 0.07 0.10 0.10 0.08 0.10 0.30 -0.05 -0.04 0.15 0.10 -0.10 -0.08 0.20 (Keep all the answers to 4 decimal places except for (4), e.g. Xxx.1234.) 1. Compute the expected rate of return for each of the three stocks. Stock A: Stock B: Stock 2. Compute the standard deviation for the three stocks. Stock A: Stock B: Stock C: 3. Compute the population covariance and hence the correlation coefficient between stocks A and B and between A and C. Correlation coefficient: Between A and B Between A and C
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