Consider the table below, which describes the ra of economic growth (X) and the rate of return on the S&P (Y). Assume that X & Y are discrete random variables. Economic S&P Returns,

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Consider the table below, which describes the rate
of economic growth (X) and the rate of return on
the S&P (Y). Assume that X & Y are discrete
random variables.
Economic
S&P Returns,
Growth, %
%
Y
4.8
3.8
3.5
4.6
4.2
7.2
3.6
5.1
a)
of the S&P and economic growth
Compute the covariance between the returns
b)
Compute the correlation coefficient and
interpret your findings
Transcribed Image Text:Consider the table below, which describes the rate of economic growth (X) and the rate of return on the S&P (Y). Assume that X & Y are discrete random variables. Economic S&P Returns, Growth, % % Y 4.8 3.8 3.5 4.6 4.2 7.2 3.6 5.1 a) of the S&P and economic growth Compute the covariance between the returns b) Compute the correlation coefficient and interpret your findings
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