The Grunewald Company has developed the following data regarding the rates of return on a potential stock and the market:

State of the Economy Probability of Each Rates of Return If State occurs

_________________ State Occurring Stock A Market

Deep Recession .20 (20%) (30%)

Mild recession .20 10 5

Average .20 15 20

Mild boom .20 20 25

Strong boom .20 25 30

1. Calculate the correlation between stock A and the market.
2. Calculate the probability that stock As return is lower than negative 8%, that is

P (K<-8%))=?

3. Calculate the probability that stock As return is between -8% and 15%, that is

P (-8%