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There is a 38% chance of a recession, a 52% chance of normal growth, and a 10% chance of expansion. A stock fund returns -8%,
There is a 38% chance of a recession, a 52% chance of normal growth, and a 10% chance of expansion. A stock fund returns -8%, 11%, and 14%, respectively, in each of these scenarios. Meanwhile, a bond fund returns 1%, 7%, and -4%, respectively, in each of these scenarios. What is the correlation coefficient between these two risky assets? Make sure you use as many decimal places as possible in your intermediate steps.
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