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The return on Stock A is 15%, 10%, and -25% when the market condition is good, normal, and bad, respectively. The return on Stock B
The return on Stock A is 15%, 10%, and -25% when the market condition is good, normal, and bad, respectively. The return on Stock B is 50%, 10%, and -30% when the market condition is good, normal, and bad, respectively. If the probability of good economy, normal economy, and bad economy is 20%, 40%, and 40%, respectively, find the covariance between the returns of Stock A and Stock B.
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