1. Consider the following realized annual returns:

Year End	Index Realised Return (%)	Stock A Realised Return (%)
2000	23.6	46.3
2001	24.7	26.7
2002	30.5	86.9
2003	9.0	23.1
2004	-2.0	0.2
2005	-17.3	-3.2
2006	-24.3	-27.0
2007	32.2	27.9
2008	4.4	-5.1
2009	7.4	-11.3

The average annual return on the Index from 2000 to 2009 is closest to:

		4.00%
		8.75%
		7.10%
		9.75%

2. What is the standard deviation of returns on the following two asset portfolio?:Asset A - weighting of 30% of value of portfolio - std dev. of returns 20%Asset B -weighting of 70% of value of portfolio - std dev. of returns 25%Correlation between Asset A & Asset B of 0.2

		19.6%
		21.2%
		22.7%
		27.3%