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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
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 0.12 and 0.16, respectively. (Round your answer to 4 decimal places. For example .1244)
| Â |
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 |
Â
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