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?

Answer is complete but not entirely correct.

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

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? $($Do not round intermediate calculations. Enter "Mean HPR$"$ answers as percents

rounded to $2$ decimal places and other answers as numbers rounded to $4$ decimal places.$)$