As an investment advisor for MREAF $($Momentum Real Estate Advisory Fund$),$ you are about to make a presentation to the portfolio

manager of the ET&T pension fund. You would like to show what would have happened had ET&T made an investment in MREAF

during the past $13$ quarters. The ET&T manager has provided you with historical data on the performance of its portfolio, which is made

up entirely of common stock. Historical data for the ET&T portfolio and MREAF are as follows:

Required:

a$.$ Calculate the quarterly HPR for each investment. HINT: The first $HPR$ will be in quarter $2$ because $2$ quarters are needed to calculate

a return. The first quarter dividend won't be included in the calculations.

b$.$ Calculate the arithmetic mean HPR$,$ the standard deviation of the HPRs$,$ and the geometric mean for each fund. Which fund

contained more risk per unit of return?

c$.$ Calculate the covariance and correlation between Stock Fund and Real Estate Fund?

d$.$ Would the proposed portfolio provide any investment diversification?

e$.$ Assume each investment could have been combined in a portfolio with weights ranging from $0$ percent to $100$ percent. What pattern

of risk and return would result if each investment were added $($deleted$)$ in increments of $10$ percent $($remember that the sum of the two

proportions must always sum to $100\%)?$

Complete this question by entering your answers in the tabs below.

Calculate the quarterly HPR for each investment. HINT: The first HPR will be in quarter $2$ because $2$ quarters are needed to

calculate a return. The first quarter dividend won't be included in the calculations.

Note: Do not round intermediate calculations. Enter your answers as a percent rounded to $2$ decimal places.