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State of the Economy Deep recession Mild recession Average Mild boom Strong boom Probability 0.05 0.25 0.35 0.20 0.15 Company A -20% 0 10 15 30 Company B -40% 10 0 25 30

State of the Economy Deep recession Mild recession Average Mild boom Strong boom Probability 0.05 0.25 0.35 0.20 0.15 Company A -20% 0 10 15 30 Company B -40% 10 0 25 30

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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From the table given, how can I compute 1. the covariance of returns and 2. the correlation between Company A and B? Thanks!

State of the Economy Deep recession Mild recession Average Mild boom Strong boom Probability 0.05 0.25 0.35 0.20 0.15 Company A -20% 0 10 15 30 Company B -40% 10 0 25 30
Transcribed Image Text:State of the Economy Deep recession Mild recession Average Mild boom Strong boom Probability 0.05 0.25 0.35 0.20 0.15 Company A -20% 0 10 15 30 Company B -40% 10 0 25 30
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