Question 22 What is the correlation between stocks X and Z?
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Question 22
What is the correlation between stocks X and Z?
State of the Economy Probability of Occurrence
Stock X
Stock Y
Stock Z
Expected Return Expected Return Expected Return
Recession
35%
25%
-10%
15%
Average
45%
14%
8%
25%
Boom
20%
4%
14%
-10%
O 0.96
O 0.51
O -0.26
O 0.26

Top Answer

Expected Return Stock X : (35% x 25%) + (45% x 14%) + (20% x 4%) = 15.9% Stock Z : (35% x 15%) + (45% x 25%) + (20% x -10%) =... View the full answer

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