.. Airtel Zambia LTE 1:10 PM Back Class Test BF330.pdf Page 1 of 2 QUESTION FOUR You are given the following information concerning stock and the market: Returns Year Stock Market 1996 27% 2005 2009 19% 5% 2010 2011 -12% 399 19 2012 2013 16 27% Required: a) Cakulate the average return and standard deviation for the market and the stock b) Calculate the correlation between the stock and the market, as well as the stock's beta c) Cakulate the covariance involving the market and stock QUESTION FIVE Assume we have cqually invested in two different companies, ZICTA and AIRTEL. We anticipate that there is a 15% chance that next year's stock returns for ZICTA will be 6%, a 60% probability that they will be 8% and a 25% probability that they will be 10%. In addition, we already know the expected value of returns is 8.2%, and the standard deviation is 1.249% We also anticipate that the same probabilities and states are associated with 4% return for AIRTEL a 5% retum, and a 5.5% return. The expected value of returns is then 4 975 and the standard deviation is 0.40%Calculate the portfolio standard deviation: END OF ASSIGNMENT CLASS TEST Page 2 of 2