1. Amazon had returns over the last 5 years of 7%, 10%, -2%, 4%, and 1%, with a volatility of 4.74%.

1. What is the average return for Amazon over this time period?

2. Overstock had a mean return of 7% and volatility of 8.4% over the last 5 years. Suppose you put 70% of your money in Amazon Corp. and the remainder in Overstock. Using the historical returns of the individual assets, what is the expected return on the portfolio?

3. If the returns for Amazon and Overstock have a correlation of 0.243, what is the expected standard deviation of the portfolio?

4. If Amazon has a beta of 1.7 and Overstock has a beta of 2.2, what is the beta of the portfolio?

2. You have $20,000 to invest in some combination of the market portfolio and a risk-free asset. Suppose you desire a beta of .60. How much money should you invest in the market portfolio?

3. You invest $25,000 in Google Inc. stock. Google has an expected return of 12% and a return variance of 0.0225. You also invest $40,000 in Tesla stock. Tesla has an expect return of 10% and a return variance of 0.36. The correlation between Google and Tesla is .17.
   1. What is the expected return of your overall portfolio?

2. What is the volatility of your overall portfolio?