Over the next year, there is a 78% chance of the market being in state 1, otherwise it is in state 2. Shares in Cornelius.com will earn a return of 5.10% in state 1, and 6.30% in state 2. Shares in GiantBadger will earn a return of 8.20% in state 1, and 1.70% in state 2. What is the covariance of the two security returns? 0.000133 -0.000332 0.003498 -0.000134
Over the next year, there is a 78% chance of the market being in state 1, otherwise it is in state 2. Shares in Cornelius.com will earn a return of 5.10% in state 1, and 6.30% in state 2. Shares in GiantBadger will earn a return of 8.20% in state 1, and 1.70% in state 2. What is the covariance of the two security returns? 0.000133 -0.000332 0.003498 -0.000134
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Over the next year, there is a 78% chance of the market being in state 1, otherwise it is in state 2. Shares in Cornelius.com will earn a return of 5.10% in state 1, and 6.30% in state 2. Shares in GiantBadger will earn a return of 8.20% in state 1, and 1.70% in state 2. What is the covariance of the two security returns?
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0.000133 |
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-0.000332 |
||
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0.003498 |
||
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-0.000134 |
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