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Given the returns and probabilities for the three possible states listed here, calculate the covariance between the returns of Stock A and Stock B. For convenience, assume that the expected returns of Stock A and Stock B are 0.13 and 0.16, respectively. (Round your answer to 4 decimal places. For example .1244)

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

Financial Management, Finance

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