Consider the following table: Stock Fund Bond Fund Scenario Probability Rate of Return Rate of Return Severe
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Question:
Consider the following table:
Stock Fund | Bond Fund | ||
Scenario | Probability | Rate of Return | Rate of Return |
Severe recession | 0.05 | 44% | 13% |
Mild recession | 0.25 | 16% | 11% |
Normal growth | 0.40 | 10% | 4% |
Boom | 0.30 | 30% | 3% |
a. Calculate the values of mean return and variance for the stock fund.
Mean return%
Variance%-Squared
b. Calculate the value of the covariance between the stock and bond funds.
Covariance %-Squared
Related Book For
Statistical Reasoning for Everyday Life
ISBN: 978-0321817624
4th edition
Authors: Jeff Bennett, Bill Briggs, Mario F. Triola
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