Consider assets (A 1 ) and (A 2 ), whose holding period returns (R 1 ) and (R 2 ), in five possible scenarios, are given in the following table Note that the probabilities are not equal, and that returns are not given as a percentage (if you prefer, you might also write, e g, (R 1 left( 1 ight) 3 )...

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Consider assets (A_{1}) and (A_{2}), whose holding period returns (R_{1}) and (R_{2}), in five possible scenarios, are

Question:

Consider assets $A_{1}$ and $A_{2}$, whose holding period returns $R_{1}$ and $R_{2}$, in five possible scenarios, are given in the following table:

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Note that the probabilities are not equal, and that returns are not given as a percentage (if you prefer, you might also write, e.g, $R_{1}\left({ }_{1}\right)=3 \%$ ). Find the expected value and the standard deviation of the returns of the two assets, as well as their (Pearson) coefficient of correlation.

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