Question: Stock A and B have the following return distribution depending on the state of economy. Good Bad Ugly Stock A2596 1096 Stock B 196 -596

Stock A and B have the following return distribution depending on

Stock A and B have the following return distribution depending on the state of economy. Good Bad Ugly Stock A2596 1096 Stock B 196 -596 3596 -2596 The probability of the good state is 0.5, the probability of the bad state is 0.3 and the probability of the ugly state is 0.2. The standard deviation of stock Ais 18.9% and the standard deviation of stock B is 14.73%. What is the correlation between stock A and stock B

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