2. Consider 3 stocks A, B and C and the risk-free rate RF=0.5%. The logarithmic rates of return are as follows: 1 2 3 4 5 6 RA, (%) 6 6 -2 2 5 8 R,:(%) 7 9 3 6 6 7 Rc,:(%) 4 2 8 3 -1 -5 a) Compute the mean returns the holding returns for the entire period. b) Determine the risk of each stock. c) Measure the correlation between A and B, A and C, and B and C. d) Compute the expected return and risk for the following portfolios: P1 : 40% from the budget was invested in A and the rest of the money in B P2:XA=40%,xc=60% P3.XA=30%,xg=30%,xc=40% P4:Xp3=70%,*RF=30% Determine the contribution of each stock to the above portfolios return and risk. 2. Consider 3 stocks A, B and C and the risk-free rate RF=0.5%. The logarithmic rates of return are as follows: 1 2 3 4 5 6 RA, (%) 6 6 -2 2 5 8 R,:(%) 7 9 3 6 6 7 Rc,:(%) 4 2 8 3 -1 -5 a) Compute the mean returns the holding returns for the entire period. b) Determine the risk of each stock. c) Measure the correlation between A and B, A and C, and B and C. d) Compute the expected return and risk for the following portfolios: P1 : 40% from the budget was invested in A and the rest of the money in B P2:XA=40%,xc=60% P3.XA=30%,xg=30%,xc=40% P4:Xp3=70%,*RF=30% Determine the contribution of each stock to the above portfolios return and risk