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Consider the following table Stock Fund Bond Fund Scenario Probability Rate of Return Rate of Return Severe recession .07 - 37% -9 Mild recession .

Consider the following table

Stock Fund Bond Fund
Scenario Probability Rate of Return Rate of Return
Severe recession .07 – 37% –9
Mild recession .26 –8% 19
Normal growth .35 19% 10
Boom .32 29% –5

Required:
(a)

Calculate the values of mean return and variance for the stock fund. (Round your answers to 2 decimal places.)

Mean return
Variance

(b)

Calculate the value of the covariance between the stock and bond funds. (Round your answer to 2 decimal places. Negative amount should be indicated by a minus sign.)

Covariance
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Finance-8363332.xls

Consider the following table
Stock Fund Bond Fund
Scenario Probability Rate of Return Rate of Return
Severe recession .07 – 37% –9
Mild recession .26 –8% 19
Normal growth .35 19% 10
Boom .32...

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