Based on the information below please calculate the


Based on the information below, please calculate the expected return and standard deviation of each of the following stocks. Assume each state of the economy is equally likely to happen. What are the covariance and correlation between the returns of two stocks?

State of Economy Return on Stock A Return on Stock B
Bear 0.082 -.065
Normal 0.095 .124
Bull 0.63 .185

 

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Finance Basics: Based on the information below please calculate the
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