Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Calculate the correlation coefficient (PAB) for the following situation: (Round intermediate calculations and the final answer to 4 decimal
place, e.g. 0.2921.)
State of the
economy
High growth
Moderate
Recession
Probability of
occurrence
25%
20%
55%
Correlation coefficient
Expected return on
stock A in this state
44.0%
23.0%
-11.0%
Expected return on
stock B in this state
61.0%
31.0%
-21.0%
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Transcribed Image Text:Calculate the correlation coefficient (PAB) for the following situation: (Round intermediate calculations and the final answer to 4 decimal place, e.g. 0.2921.) State of the economy High growth Moderate Recession Probability of occurrence 25% 20% 55% Correlation coefficient Expected return on stock A in this state 44.0% 23.0% -11.0% Expected return on stock B in this state 61.0% 31.0% -21.0%
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