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Calculate covariance between returns of stock a-stock b

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Given the returns and probabilities for the three possible states listed here, calculate the covariance between the returns of Stock A and Stock B. For convenience, assume that the expected returns of Stock A and Stock B are 0.09 and 0.15, respectively. (Round your answer to 4 decimal places. For example .1244)

Probability Return A Return B

Good 0.35 0.30 0.50

Ok 0.50 0.10 0.10

Poor 0.15 -0.25 -0..30

Reference no: EM132796937

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