Transcribed Image Text
You are given the following information: State ofEconomyReturn onStock AReturn onStock B Bear.119?.062 Normal.098.165 Bull.090.250 Assume each state of the economy is equally likely tohappen. Calculate the expected return of each of the following stocks.(Do not round intermediate calculations and enter youranswers as a percent rounded to 2 decimal places, e.g.,32.16.) Expected return Stock A% Stock B% Calculate the standard deviation of each of the followingstocks. (Do not round intermediate calculations and enteryour answers as a percent rounded to 2 decimal places, e.g.,32.16.) Standard deviation Stock A% Stock B% What is the covariance between the returns of the two stocks?(A negative answer should be indicated by a minus sign. Donot round intermediate calculations and round your answerto 6 decimal places, e.g.,32.161616.) Covariance What is the correlation between the returns of the two stocks?(A negative answer should be indicated by a minus sign. Donot round intermediate calculations and round your answerto 4 decimal places, e.g.,32.1616.) Correlation