You are given the following information: 
State of 
Return on 
Return on 
Bear 
.111 
.054 
Normal 
.106 
.157 
Bull 
.082 
.242 
Assume each state of the economy is equally likely to happen. 
Calculate the expected return of each of the following stocks. (Do not round intermediate calculations and enter your answers 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 following stocks. (Do not round intermediate calculations and enter your 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. Do not round intermediate calculations and round your answer to 6 decimal places, e.g., 32.161616. 
What is the correlation between the returns of the two stocks? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 32.1616.) 
Their are three events, so probability of each event = 1 / 3
Expected return
Expected return = sum of ( probability x return)
Stock A = 0.111 x 1 / 3 + 0.106 x 1 / 3 + 0.082 x 1 / 3 = 0.09966666 or 9.966666% or 9.97%
Stock B = 0.054 x 1 / 3 + 0.157 x 1 / 3 + 0.242 x 1 / 3 = 0.1149999 or 11.50%
Standard deviation (?)
or, ?_{A} = 1.27%
or, ?_{A} = 12.44%
Covariance
or, Covariance = ()0.001298
Correlation (r)
r = Covariance / ( ?_{A} x ?_{B} )
or, r = ()0.0012976666 / (0.0126578908 x 0.12443740) = ()0.82385513623 or ()0.8239
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