Consider the following table: Stock Fund Bond Fund Rate of Rate of Scenario Probability Return Return Severe 0.05 -38% -8% recession Mild recession 0.25 8% -16% Normal growth 0.40 18% 5% Boom 0.30 32% -5% b. Calculate the values of expected return and variance for the stock fund. (Do not round intermediate calculations. Enter "Expected return" value as a percentage rounded to 1 decimal place and "Variance" as decimal number rounded to 4 decimal places.) Expected return Variance c. Calculate the value of the covariance between the stock and bond funds. (Negative value should be indicated bya minus sign. Do not round intermediate calculations. Enter your answer as a decimal number rounded to 4 decimal places.) Covariance
Consider the following table: Stock Fund Bond Fund Rate of Rate of Scenario Probability Return Return Severe 0.05 -38% -8% recession Mild recession 0.25 8% -16% Normal growth 0.40 18% 5% Boom 0.30 32% -5% b. Calculate the values of expected return and variance for the stock fund. (Do not round intermediate calculations. Enter "Expected return" value as a percentage rounded to 1 decimal place and "Variance" as decimal number rounded to 4 decimal places.) Expected return Variance c. Calculate the value of the covariance between the stock and bond funds. (Negative value should be indicated bya minus sign. Do not round intermediate calculations. Enter your answer as a decimal number rounded to 4 decimal places.) Covariance
Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
7th Edition
ISBN:9780357033609
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Chapter13: Investing In Mutual Funds, Etfs, And Real Estate
Section: Chapter Questions
Problem 8FPE
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