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Security analysts at Smith Blarney have assigned the following probability distributions to the rates of...

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Accounting

Security analysts at Smith Blarney have assigned the following probability distributions to the rates of return on Phoenix and LV stocks one year from now as follows

Return(%) Probability

States Phoenix LV

Worst -20 -10 0.2

Bad 0 0 0.3

Normal 20 10 0.3

Good 40 20 0.2

a. Find the expected rate of return on each stock.

b. Find the standard deviation of each stock

c. Find covariance and correlation coefficient of the two stocks.

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