Given the returns and probabilities for the three possible

Reference no: EM13587408

Given the returns and probabilities for the three possible states listed here, calculate the covariance between the returns of Stock

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 0.10 and 0.16, 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

k A and Stock B. For convenience, assume that the expected returns of Stock A and Stock B are 0.10 and 0.16, respectively.

Reference no: EM13587408

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