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company 1 company 2 company 3 company 4 market 1/1/2020 10% 10% 10% 10% 10% 12/1/2019 20% 40% 10% 40% 20% 11/1/2019 30% 30% 50%

company 1

company 2

company 3

company 4

market

1/1/2020

10%

10%

10%

10%

10%

12/1/2019

20%

40%

10%

40%

20%

11/1/2019

30%

30%

50%

30%

30%

10/1/2019

30%

50%

30%

20%

40%

9/1/2019

40%

40%

20%

10%

50%

a, What is the correlation between company 1 and company 3?

  1. 0.50
  2. -0.40
  3. 0.34
  4. -0.05

b, What is the correlation between company 1 and company 4?

  1. 0.07
  2. -0.10
  3. 0.15
  4. -0.25

c, If you must hold company 1, which other company is a better option than the others to be added to your portfolio?

  1. Company 2
  2. Company 3
  3. Company 4
  4. All equally important

d, What is the beta of the company 2? (hint: check slope)

  1. 0.6
  2. 0.7
  3. 0.8
  4. 0.9

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