$[$YOU SHOULD USE EXCEL TO CHECK YOUR CALCULATIONS$]$

Consider the following table:

Stock Fund Bond Fund

Scenario Probability Rate of Return Rate of Return

Severe recession $0\mathrm{.}1032\%17\%$

Mild recession $0\mathrm{.}2022\%15\%$

Normal growth $0\mathrm{.}4015\%6\%$

Boom $0\mathrm{.}3035\%4\%$

b$.$

Calculate the values of expected return and variance for the stock fund. $($Do not round intermediate calculations. Enter "Expected return" value as a percentage rounded to $1$ decimal place and "Variance" as decimal number rounded to $4$ decimal places.$)$

Expected return

$8\mathrm{.}9$

$\%$

Variance

$0\mathrm{.}0578$

c$.$

Calculate the value of the covariance between the stock and bond funds. $($Negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a decimal number rounded to $4$ decimal places.$)$

Covariance