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You are given the following information: State of Economy Bear Normal Bull Return on Stock A 114 103 085 Return on Stock B - 057
You are given the following information: State of Economy Bear Normal Bull Return on Stock A 114 103 085 Return on Stock B - 057 160 245 Assume each state of the economy is equally likely to happen. a) Calculate the expected return of each stock. b) Calculate the standard deviation of each stock. c) What is the covariance between the returns of the two stocks? d) What is the correlation between the returns of the two stocks
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