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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 (%) Mild recession -14 0 Normal growth 0.30 0.40 0.30 Boom 33 3 What is the expected return for the bond fund? Your answer should be in percentage points and accurate to the hundredth. For example, if your answer is 10.2511%, then type in 10.25. What is the standard deviation of the bond fund? Your answer should be in percentage points and accurate to the hundredth. What is the correlation coefficient between the stock returns and the bond returns? Your answer should be in decimal values and accurate to the hundredth (NOT in percentage points. So 0.24 if the correlation is 0.2410)
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