6. Pfizer and Merck are two American pharmaceutical firms. The following table gives the end-of-year stock prices for each of the firms for the years 1981–92 as well as the dividends paid in the years 1982–92.

a. For the decade 1982–92 calculate the following:

n Annual returns from each of the shares. (Don't forget the dividends!)

n The mean, variance, and standard deviation of each stock's return.

n The covariance and the correlation coefficient of the returns.

b. Graph the mean portfolio return (y-axis) against the standard deviation of the portfolio return (x-axis) for portfolios of the two shares in which the weight of Pfizer goes from 0 to 1.4.