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In: Finance

Consider the following table:     Stock Fund Bond Fund Scenario Probability Rate of Return Rate of...

Consider the following table:

   

Stock Fund Bond Fund
Scenario Probability Rate of Return Rate of Return
  Severe recession 0.05        –30%        –9%         
  Mild recession 0.25        –10%        15%         
  Normal growth 0.40        15%        8%         
  Boom 0.30        20%        –5%         
b.

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

      

  Mean return %
  Variance   
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. Round your answer to 2 decimal places.)

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jeff jeffy answered 1 year ago
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