Given the distributions of returns for the following two stocks,
calculate the covariance of the returns for the two stocks. Assume
the expected return is 10.8 percent for Stock 1 and 9.7 percent for
Stock 2.
Prob | Stock 1 | Stock 2 |
0.4 | 0.09 | 0.11 |
0.5 | 0.11 | 0.08 |
0.1 | 0.17 | 0.13 |
0.000321 |
0.000094 |
0.000516 |
0.717507 |
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