how do I calculate the product of the deviations so that I can get the Covariance number for the Bond or the stock? ProbabilityStock Fund Rate of ReturnJxK-ProbabilityxRate of ReturnSquared Deviation(diff from the mean returns)Variance (Probability X Squared Deviation)Bond fund Rate of ReturnJxK-ProbabilityxRate of ReturnSquared Deviation(diff from the mean returns)Variance (Probability X Squared Deviation)Severe0.1-34-3.42237.29223.729-9.00-0.9201.6420.164Mild0.2-20-41108.89221.7785.00125.005Normal0.3216.359.2917.7879.002.781.0024.3Boom0.43614.4515.29206.1166.002.436.0014.4Expected or Mean Return 13.3 669.41Expected or Mean Return5.20 63.864 Standard Deviation 25.87295886 7.99149548

Data given: Probability Stock Fund Rate of Return A B 0.1 -34% 0.2 -20% 0.3 21% 0.4 36%…

Answered: how do I calculate the product of the…

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter6: Risk And Return

Section: Chapter Questions

Problem 7MC: Explain correlation to your client. Calculate the estimated correlation between Blandy and...

See similar textbooks

Related questions

Question

how do I calculate the product of the deviations so that I can get the Covariance number for the Bond or the stock?

	Probability	Stock Fund Rate of Return	JxK-ProbabilityxRate of Return	Squared Deviation(diff from the mean returns)	Variance (Probability X Squared Deviation)	Bond fund Rate of Return	JxK-ProbabilityxRate of Return	Squared Deviation(diff from the mean returns)	Variance (Probability X Squared Deviation)
Severe	0.1	-34	-3.4	2237.29	223.729	-9.00	-0.9	201.64	20.164
Mild	0.2	-20	-4	1108.89	221.778	5.00	1	25.00	5
Normal	0.3	21	6.3	59.29	17.787	9.00	2.7	81.00	24.3
Boom	0.4	36	14.4	515.29	206.116	6.00	2.4	36.00	14.4
Expected or Mean Return			13.3		669.41	Expected or Mean Return	5.20		63.864
			Standard Deviation		25.87295886				7.99149548

Expert Solution

Step 1

Data given:

Probability	Stock Fund Rate of Return
A	B
0.1	-34%
0.2	-20%
0.3	21%
0.4	36%

Probability	Bond Fund Rate of Return
A	B
0.1	-9%
0.2	5%
0.3	9%
0.4	6%

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Follow-up Questions

Read through expert solutions to related follow-up questions below.

Follow-up Question

Which cell or column is used for the covariance?

Solution

by Bartleby Expert

SEE SOLUTION

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions