Given the returns and probabilities for the three possible


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 0.18, 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

Request for Solution File

Ask an Expert for Answer!!
Financial Management: Given the returns and probabilities for the three possible
Reference No:- TGS01393294

Expected delivery within 24 Hours