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2015 story a h. What do the results for the expected returns and standard deviations over the 5-year sample, for each stock tell you? (2

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2015 story a h. What do the results for the expected returns and standard deviations over the 5-year sample, for each stock tell you? (2 marks) i. If you were an investor that did not like taking high risks, which stock would you prefer and why? (1 mark) J. Calculate the covariance between stocks A and B (3 marks) k. Calculate the correlation coefficient for stocks A and B. (1 mark) 1. Intrepret what the correlation coefficient is telling you about the relationship between stocks A and B. (2 marks) Section 4: Portfolio Theory (48 marks) ople data, showing average historical 1. You have been given the following sample data, showing returns for each of two stocks, over the period 2015 to 2010. Stock A % Stock B (%) 5 12 Year 2015 2016 2017 2018 2019 21 27 27 -32 18 24 11 18

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