Question: Please don't solve it by EXCEL. 1. Use the ollowing scenario analysis. Probability Stock fund Bond fund Recession 0.4 -14% 16% Normal 0.2 13% 5%

Please don't solve it by EXCEL.

Please don't solve it by EXCEL. 1. Use the ollowing scenario analysis.

1. Use the ollowing scenario analysis. Probability Stock fund Bond fund Recession 0.4 -14% 16% Normal 0.2 13% 5% Boom 0.4 30% -4% 1) Calculate the mean return and S.D. for the stock fund. (5pts) 2) Calculate the mean return and S.D. for the bond fund. (5pts) 3) Calculate the covariance and correlation coefficient of these two funds. (6pts) 4) Assume that 70% of your risky portfolio invests into stock fund and 30% of your risky portfolio invests into bond fund. Calculate the expected return of your risk portfolio. (2pts) 5) Calculate the S.D. of your risky portfolio. (3pts)

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