Question: Please answer the questions in the space provided below each question. Show all of your work and circle your nal answer. 1. You forecast there

 Please answer the questions in the space provided below each question.

Please answer the questions in the space provided below each question. Show all of your work and circle your nal answer. 1. You forecast there are three potential scenarios for the economy: a hull, at, and bear market. You also estimate the returns for a stock and bond mutual fund as follows: Probability of Scenario Using this information, you nd for the stock fund: E{r5]=.[}32 and {Ir0.1469, and for the bond fund: Eirgl=0.016 and ch=0.0561. A. Compute the covariance between the stock and bond fund. {Record your answer to at least four decimal places) {10 points) B. Compute the correlation ooetl'icient between the stock and bond fund. [Record your answer to at least four decimal places] {10 points)

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