12.6 The following table lists possible rates of return on two risky assets, M and J. The table also lists their joint probabilities, that is, the probabilities that they will occur simultaneously

a. List the possible values for RM and the probabilities that correspond to those values.

b. Compute the following items for RM.
i. Expected value ii. Variance iii. Standard deviation

c. List the possible values for RJ and the probabilities that correspond to those values.

d. Compute the following items for RJ.
i. Expected value ii. Variance iii. Standard deviation

e. Calculate the covariance and correlation coefficient of RM and RJ.

f. Assume M is the market portfolio. Calculate the beta coefficient for security J.

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RM RJ Prob(RM, RJ) 0.16 0.16 0.10 0.16 0.18 0.06 0.16 0.22 0.04 0.18 0.18 0.12 0.18 0.20 0.36 0.18 0.22 0.12 0.20 0.18 0.02 0.20 0.20 0.04 0.20 0.22 0.04 0.20 0.24 0.10