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4. Determine the correlation between price movements of stocks A and B using the forecast of their rate of return and the assessments of the possible states of the world in the following table. Before doing the correlation, from an expectation of whether that correlation will be closer to 1 or -1 by merely inspecting the member. (Please give brief explanation with the formula) State of the economy Profitability Stock A: Rate of Return Rate of Return Stock B: Moderate recession 0.05 -0.02 -0.20 0.15 -0.01 -0.10 Slight recession 0.60 0.15 0.15 2% growth 0.20 0.15 0.30 3% growth

4. Determine the correlation between price movements of stocks A and B using the forecast of their rate of return and the assessments of the possible states of the world in the following table. Before doing the correlation, from an expectation of whether that correlation will be closer to 1 or -1 by merely inspecting the member. (Please give brief explanation with the formula) State of the economy Profitability Stock A: Rate of Return Rate of Return Stock B: Moderate recession 0.05 -0.02 -0.20 0.15 -0.01 -0.10 Slight recession 0.60 0.15 0.15 2% growth 0.20 0.15 0.30 3% growth

MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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4. Determine the correlation between price movements of stocks A andB using the forecast of their rate of return and the assessments of the possible states of the world in the following table. Before doing the correlation, from an expectation of whether that correlation will be closer to 1 or -1 by merely inspecting the member. (Please give brief explanation with the formula) State of the economy Profitability Stock A: Rate of Return Rate of Return Stock B: Moderate 0.05 -0.02 -0.20 recession 0.15 -0.01 -0.10 Slight recession 0.60 0.15 0.15 2% growth 0.20 0.15 0.30 3% growth
Transcribed Image Text:4. Determine the correlation between price movements of stocks A andB using the forecast of their rate of return and the assessments of the possible states of the world in the following table. Before doing the correlation, from an expectation of whether that correlation will be closer to 1 or -1 by merely inspecting the member. (Please give brief explanation with the formula) State of the economy Profitability Stock A: Rate of Return Rate of Return Stock B: Moderate 0.05 -0.02 -0.20 recession 0.15 -0.01 -0.10 Slight recession 0.60 0.15 0.15 2% growth 0.20 0.15 0.30 3% growth
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