Problem:
Using the following information find expected return, variance and standard deviation of stock A and B. Also find the covariance and correlation between Stock A and B.
Note: Explain all steps comprehensively.
|
States
|
Probability
|
Return on StockA
|
Return on StockB
|
|
1
|
20.00%
|
26.00%
|
9.00%
|
|
2
|
30.00%
|
18.00%
|
15.00%
|
|
3
|
50.00%
|
10.00%
|
30.00%
|