Question: Given the returns and probabilities for the three possible states listed here, calculate the covariance between the returns of Stock A and Stock B. For
Given the returns and probabilities for the three possible states listed here, calculate the covariance between the returns of Stock A and Stock B. For convenience, assume that the expected returns of Stock A and Stock B are 0.10and0.19, respectively. (Round your answer to 4 decimal places. For example .1244)
Probability Return(A) Return(B)
Good 0.35 0.3 0.5
OK 0.5 0.1 0.1
Poor 0.15 -0.25 -0.3
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