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State of Economy Probability of State of Economy Return on Stock J Return on stock K Bear .23 -.013 .041 Normal .58 .145 .069 Bull .19 .225 .099 What is the...

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Finance

State of EconomyProbability of State of EconomyReturn on Stock JReturn on stock K
Bear.23-.013.041
Normal.58.145.069
Bull.19.225.099

What is the Convariance and Correlation betweenthe returns of the 2 stocks?

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3.7 Ratings (690 Votes)
State of Economy Probability J Return K Return Bear 023 013 0041 Normal 058 0145 0069 Bull 019 0225 0099 For Stock J Expected Return p1R1 p2R2 p3R3 where pi is the probability of i state of the economy and Ri is the return during i state of the    See Answer
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State of EconomyProbability of State of EconomyReturn on Stock JReturn on stock KBear.23-.013.041Normal.58.145.069Bull.19.225.099What is the Convariance and Correlation betweenthe returns of the 2 stocks?

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