Question: please solve a2. and c. :) You are given the following information: State of Return on Return on Stock A Stock B Economy Bear .119

please solve a2. and c. :)
You are given the following information: State of Return on Return on Stock A Stock B Economy Bear .119 -062 Normal 098 .165 Bull .090 250 Assume each state of the economy is equally likely to happen. a. Calculate the expected return of each stock. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) b. Calculate the standard deviation of each stock. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) c. What is the covariance between the returns of the two stocks? (A negative answer should be indicated by a minus sign, Do not round intermediate calculations and round your answer to 6 decimal places, e.g., .161616.) d. What is the correlation between the returns of the two stocks? (A negative answer should be indicated by a minus sign, Do not round intermediate calculations and round your answer to 4 decimal places, e.g., .1616.) Answer is not complete. a. 10.22 % % b. 1.22 % Stock A Stock B Stock A Stock B Covariance Correlation 13.17 % C. d. -1.0024
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
