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Construct joint probability distribution for returns of stocks X, Y. Return of X is either 0% or 10% and return of Y is either 2%
Construct joint probability distribution for returns of stocks X, Y. Return of X is either 0% or 10% and return of Y is either 2% or 7%. Your task is to fill the tables below by writing in probabilities of all four outcomes. No explanation necessary. Probabilities must be such that: a) X, Y are positively correlated Y return 2% 7% X return 0% 10% b) X, Y are perfectly negatively correlated (Pxy=-1) Y return 2% 7% X return 0% 10% c) X, Y are independent Y return 2% 7% X return 0% 10% Construct joint probability distribution for returns of stocks X, Y. Return of X is either 0% or 10% and return of Y is either 2% or 7%. Your task is to fill the tables below by writing in probabilities of all four outcomes. No explanation necessary. Probabilities must be such that: a) X, Y are positively correlated Y return 2% 7% X return 0% 10% b) X, Y are perfectly negatively correlated (Pxy=-1) Y return 2% 7% X return 0% 10% c) X, Y are independent Y return 2% 7% X return 0% 10%
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