Answer Happy

Based on the following information, State of economy Bear Normal Bull Probability of state of economy 0.30 0.50 0.20 Return on stock ] -0.040 0.140 0.220 Return on stock K 0.038 0.064 0.094 a. Calculate the expected return and standard deviation for each of the following stocks. (Do not round the intermediate calculations. Round the final answer to 2 decimal places.) Expected return Standard deviation Stock J 10.21 % 9.78 % Stock K 6.22% 1.95% b. What are the covariance and correlation between the returns of the two stocks? (Do not round the intermediate calculations. Round the covariance answer to 6 decimal places. Round the correlation answer to 4 decimal places.) Covariance Correlation 0.001816 0.9523