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Values of mean return and variance for the stock fund

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Reference no: EM132255610

Consider the following table:

Scenario Probability Stock Rate of ReturnRate Bond Fund Rate if Return

  1. Severe recession 0.10 -44% -11%
  2. Mild recession 0.20 -24% 17%
  3. Normal growth 0.40 29% 10%
  4. 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 12.6 %

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: EM132255610

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