Consider the following probability distribution for stocks C and D: State Probability Return on Stock C Return on Stock D 1 0.30 2 0.50 3 0.20 7% 11% -16% -9% 14% 26% Compute the correlation coefficient between the returns of stocks C and D. b) You follow the constant dollar plan to manage and revise your portfolio. Values and guidelines for portfolio revision are as follows: Initial portfolio value = $50,000 Speculative portion = $30,000 Conservative portion = $20,000 Trigger point: A rise or fall in the speculative portion of $2,000 or more than its initial value. Rebalancing action: Bring the speculative portion back to its initial level. Given the above criterion, complete the table below: Value of securities in Speculative Portion ($) Conservative Portion ($) Total Portfolio Value ($) Transactions speculative No. of shares in Speculative portion($) Portion (1) (2) (3) (4) (5) (6) 50 51 Value of securities in Speculative Portion ($) Conservative Portion ($) Total Portfolio Value ($) Transactions speculative portion($) No. of shares in Speculative Portion (1) (2) (3) (4) (5) (6) 50 51 45 45 47 50 50 52 (6 marks)