Calculate the covariance between the returns of stock

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Reference no: EM13880043

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 0.11 and 0.16, 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

Reference no: EM13880043

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