4. Below is the monthly return for Apple stock (A) and the market (M). Assume the risk-free rate is 1% per month during this time period. (Use N-1, Do NOT use N).

	Stock A	Market
Month	return (rA)	Return(rM)
September	-5%	2%
October	2%	5%
November	3%	2%
Dcember	1%	4%

(a) What is the geometric average return and arithmetic average return for Apple stock rA?

(b) What is the covariance and correlation between rA and rM?

(c) If you invest 40% of your money in stock A and 60% in the market, what is your best estimate of the standard deviation of your portfolio return?

(d) Economically, what does the standard deviation in (c) measure?