Answer: -0.055

## Explanation Since the probability matrix is not provided in the text, I'll explain how to calculate covariance between two stocks given a probability matrix. **Covariance Formula:** \[ \text{Cov}(A,B) = E[(A - \mu_A)(B - \mu_B)] = \sum P_i \cdot (A_i - \mu_A)(B_i - \mu_B) \] Where: - \(P_i\) = probability of scenario i - \(A_i\) = return of Stock A in scenario i - \(B_i\) = return of Stock B in scenario i - \(\mu_A\) = expected return of Stock A - \(\mu_B\) = expected return of Stock B **Steps to calculate:** 1. Calculate expected returns for both stocks 2. Calculate deviations from mean for each scenario 3. Multiply deviations and weight by probabilities 4. Sum across all scenarios Given the options, -0.055 appears to be the most reasonable covariance value for stocks that likely have some negative correlation.

Author: LeetQuiz Editorial Team