An analyst has projected the following. probability stocks return (%) bonds return (%) .25 14% -2% .45 -4% 8% .30 8% 4% (a) Calculate the expected return for stocks and for bonds. (6 points). (b) Calculate the variance of stocks and bonds. (8 points). (c) Write out the formula, with the numbers filled in, to find the correlation between stocks and bonds. You do not have to do the actual calculation.
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