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Consider the following investment portfolio with two stocks: Year End 2014 2015 2016 2017 2018 2019 Chez Realized Return 19% 71.5% -24.5% 55.7% 5.5% 16.7%
Consider the following investment portfolio with two stocks: Year End 2014 2015 2016 2017 2018 2019 Chez Realized Return 19% 71.5% -24.5% 55.7% 5.5% 16.7% Eggo Realized Return -13.4% 3.1% -57.2% 70% 16.1% 0.8% a. Calculate the variance and standard deviation of each stock: Chez and Eggo. 9 marks b. Calculate the covariance between stock Chez's and stock Eggo's returns. 8 marks C. Calculate the correlation coefficient between stock Chez's and stock Eggo's returns. 4 marks d. Calculate the variance on a portfolio that is made up of equal investments in stock Chez and stock Eggo. 3 marks Show all your calculations
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