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1. Using the data in the following table, calculate: A. Average return and standard deviation for each stock (4 points) B. Covariance between the stocks

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1. Using the data in the following table, calculate: A. Average return and standard deviation for each stock (4 points) B. Covariance between the stocks (2 points) C. Correlation between the stocks (2 points) D. Compute average return and standard deviation of the portfolio that maintains a 50% weight in Stock A and 50% in stock B (2 points) Year 2010 2011 2012 2013 2014 2015 Stock A -10.0% 20.0% 5.0% -5.0% 2.0% 9.0% Stock B 21.0% 7.0% 30.0% -3.0% -8.0% 25.0%

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