2. Return to the monthly returns of the five companies you chose in the previous question.

a. Using the Excel functions for average (AVERAGE) and sample standard deviation (STDEV), calculate the average and the standard deviation of the returns for each of the firms.

b. Using Excel's correlation function (CORREL), find the correlations between each pair of five stocks. What are the highest and lowest correlations?

c. Try finding correlations between pairs of stocks in the same industry. Are the correlations higher than those you found in part (b)? Is this surprising?