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3. (a) Calculate the covariance for the returns of stock 1 and stock 2 given the six years of historical returns presented below. (12 Marks)

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3. (a) Calculate the covariance for the returns of stock 1 and stock 2 given the six years of historical returns presented below. (12 Marks) (b) Given that the standard deviation of stock 1 and stock 2 in the table above is 0.2236 and 0.3225, respectively, use your answer in (4) to calculate and interpret the correlation between the 2 assets

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