1- Use the information in the covariances table and any other information you may need.

The following table shows the covariances between stocks x, y and z (4 marks)

Covariances	x	y	z
X	0.0000	0.0000455	-0.0000029
Y	0.0000455	0.0000	-0.0000061
Z	-0.0000029	-0.0000061	0.000

2a) If you had to choose only two stocks to invest in, which two would you LEAST LIKELY select together and why?

2b) If you had to choose only two stocks to invest in, which two would you MOST LIKELY select together and why?

2- As a rational investor looking to add one stock to your portfolio would you add stock A or B and why? (3 marks)

	Stock A	Stock B
ER	6%	9%
	3.5%	4.8%