You are given the following information: State of Economy Return on Stock A Return on Stock B
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Question:
You are given the following information:
State of Economy Return on Stock A Return on Stock B
Bear
Normal
Bull
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 decimal places, eg
b Calculate the standard deviation of each stock. Do not round intermediate calculations and enter your answers as a percent rounded to decimal places, eg
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 decimal places, eg
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 decimal places, eg
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