Question
You are given the following joint probability distribution of returns: State of Economy Probability of State Stock A Return Stock B Return Bad 0.6
You are given the following joint probability distribution of returns: State of Economy Probability of State Stock A Return Stock B Return Bad 0.6 -10.00% 10.00% Good 0.4 40.00% 5.00% Find the covariance between the returns on Stocks A and B.
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Fundamentals of Investments
Authors: Gordon J. Alexander, William F. Sharpe, Jeffery V. Bailey
3rd edition
132926172, 978-0132926171
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