Calculate the covariance between the returns of stock

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Reference no: EM13878798

Given the returns and probabilities for the three possible states listed here, calculate the covariance between the returns of Stock A and Stock B. For convenience, assume that the expected returns of Stock A and Stock B are 0.10 and 0.18, respectively. (Round your answer to 4 decimal places. For example .1244)

_______probability_____Return(A)______ Return(B)

Good ___0.35 _______0.30 ____________0.50

OK ____0.50 ________0.10____________ 0.10

Poor___ 0.15 _______-0.25____________ -0.30

Ignore the lines, I was trying to get the numbers to line up under prob, return a, and return b

Reference no: EM13878798

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