Covariance between the stock and bond funds

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Reference no: EM132255613

Consider the following table:

Scenario Probability StockRate of ReturnRate Bond Fund Rate of Return

Severe recession 0.10 -44% -11%

Mild recessionn 0.20 -24% 17%

Normal growth 0.40 29% 10%

Boom 0.30 34% -7% 

a. Calculate the values of mean return and variance for the stock fund. (Do not round intermediate calculations. Round "Mean return" value to 1 decimal place and "Variance" to 2 decimal places.)  

Mean return 12.60%

Variance _______ %-Squared 

b. 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. Round your answer to 2 decimal places.)

Covariance      ________%-Squared

Reference no: EM132255613

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