Given the returns and probabilities for the three possible states listed below, 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 9.05 percent and 13.20 percent, respectively. (Round answer to 4 decimal places, e.g. 0.0768.) Return on Stock Return on Stock Probability A B Good 0.25 0.30 0.50 OK 0.58 0.10 0.10 Poor 0.17 -0.25 -0.30

Chemistry: Principles and Reactions
8th Edition
ISBN:9781305079373
Author:William L. Masterton, Cecile N. Hurley
Publisher:William L. Masterton, Cecile N. Hurley
Chapter8: Thermochemistry
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Problem 65QAP: Natural gas companies in the United States use the therm as a unit of energy. One therm is 1105 BTU....
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Given the returns and probabilities for the three possible states listed below, 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 9.05 percent and 13.20 percent,
respectively. (Round answer to 4 decimal places, e.g. 0.0768.)
Return
on Stock
Return
on Stock
Probability
A
B
Good
0.25
0.30
0.50
OK
0.58
0.10
0.10
Poor
0.17
-0.25
-0.30
Transcribed Image Text:Given the returns and probabilities for the three possible states listed below, 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 9.05 percent and 13.20 percent, respectively. (Round answer to 4 decimal places, e.g. 0.0768.) Return on Stock Return on Stock Probability A B Good 0.25 0.30 0.50 OK 0.58 0.10 0.10 Poor 0.17 -0.25 -0.30
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