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The following data applies to Questions 1 to 3. Consider two risky assets: a stock fund and a bond fund with the following probability distributions.
The following data applies to Questions 1 to 3. Consider two risky assets: a stock fund and a bond fund with the following probability distributions. Scenario Probability Stock Return (%) Bond return (%) Severe recession 0.05 -40 -9 Mild recession 0.25 -14 15 Normal growth 0.40 17 8 Boom 0.30 33 -5 What is the correlation coefficient between the stock returns and the bond returns
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