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It must be A,B,C to be correct below.

Based on the following information determine the covariance and correlation between the returns of the two stocks.

State of Economy Probability of State of Economy Return of X Return of Y

Bear 0.10    -0.02    0.034

Normal                              0.65    0.138        0.062

Bull    0.25 0.218 0.092

A) Cov = 0.001023, Corr=0.9547

B) Cov = 0.001023, Corr=0.00027

C) Cov= 0.001144, Corr=0.9391

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M91535900

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