Compute covariance between returns of stock a also stock b., Ask an Expert

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Q. Portfolios with more than one asset:

Given returns also probabilities for three possible states listed here, compute covariance between returns of Stock A also Stock B. For convenience, assume that expected returns of Stock A also Stock B are 11.75 percent also 18 percent, respectively.
Probability Return (A) Return (B)

Good 0.35 0.30 0.50

OK 0.50 0.10 0.10

Poor 0.15 -0.25 -0.30

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Operation Management, Management Studies

Category:- Operation Management
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