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[answered] Based on the following information: State of Economy Probab


Based on the following information:

??

??State of
??Economy
Probability of
State of Economy
Return on
Stock J
Return on
Stock K
??Bear .23 ?.013 .041
??Normal .58 .145 .069
??Bull .19 .225 .099

??
?

Calculate the expected return for each of the stocks.?(Do not round intermediate calculations and round your answers to 2 decimal places. (e.g., 32.16))

??

Expected return ?
??Stock J %
??Stock K %

???

Calculate the standard deviation for each of the stocks.?(Do not round intermediate calculations and round your answers to 2 decimal places. (e.g., 32.16))

??

Standard deviation ?
??Stock J %
??Stock K %

??
?

What is the covariance between the returns of the two stocks??(Do not round intermediate calculations and round your answer to?6 decimal places. (e.g., 32.161616))

??

??Covariance ??

??
?

What is the correlation between the returns of the two stocks??(Do not round intermediate calculations and round your answer to?4decimal places. (e.g., 32.1616))

??
?

??Correlation ??



Expected return of Stock J =0.23 ??0.013+ 0.58? 0.145+0.19 ?0.225=0.12386

 

Expected return of Stock K=0.23 ? 0.041+ 0.58? 0.069+0.19 ?0.099=0.06826 SD of Stock J = ? 0.23...

 


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