Question

Consider the following information on two stocks: State Prob(State) Stock A Stock B Boom 15% 0.22...

Consider the following information on two stocks:

State Prob(State) Stock A Stock B
Boom 15% 0.22 -0.12
Normal 50% 0.07 0.15
Bust 35% -0.09 0.06

1.Calculate the covariance(A,B). (Enter percentages as decimals and round to 4 decimals)

2. Calculate the correlation(A,B). (Enter percentages as decimals and round to 4 decimals)

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