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Use the following information to answer Part E State of Economy Probability ABC Company Expected Return XYZ Company Expected Return Very Poor 0.30 -9% -19%
Use the following information to answer Part E
State of Economy | Probability | ABC Company Expected Return | XYZ Company Expected Return |
Very Poor | 0.30 | -9% | -19% |
Poor | 0.25 | -8% | -6% |
Good | 0.15 | 8% | 9% |
Very Good | 0.30 | 34% | 33% |
Expected Return |
| 6.70% | 4.05% |
A) Calculate the covariance of the portfolio. (2 Mark) Please answer as a decimal to 4 decimal places
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