You are given the following data about available investments: State of economy Probability Return (A) Return (B) Strong Boom 0.15 -0.60 0.75 Weak Boom 0.20 -0.30 0.50 Average 0.05 -0.10 0.15 Weak Recession 0.40 0.20 -0.10 Strong Recession 0.20 0.80 -0.35 Compute and fully interpret the following for these investments: (i) Mean rate of return for each investment. (ii) Standard deviation for each investment. (iii) Coefficient of variation for each investment. (iv) Covariance among the rates of return.

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You are given the following data about available investments:

State of economy Probability Return (A) Return (B)
Strong Boom 0.15 -0.60 0.75
Weak Boom 0.20 -0.30 0.50
Average 0.05 -0.10 0.15
Weak Recession 0.40 0.20 -0.10
Strong Recession 0.20 0.80 -0.35

Compute and fully interpret the following for these investments:
(i) Mean rate of return for each investment.
(ii) Standard deviation for each investment.
(iii) Coefficient of variation for each investment.
(iv) Covariance among the rates of return.
(v) Correlation coefficient of the rates of return. 
(vi) Briefly explain the difference in assumptions underlying portfolio theory and the CAPM. 

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Consider the given information:

State of economyProbabilityReturn (A)Return (B)
Strong Boom0.15-0.600.75
Weak Boom0.20-0.300.50
Average0.05-0.100.15
Weak Recession0.400.20-0.10
Strong Recession0.200.80-0.35


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