cooperate financial management

Status. (a) An investor invested 65% of his money in stock A and 354 in stock B and constructed a portfolio, The return data for both stock A and B are given brelowe. Year Return on stock A (96) Return on stock B (6) Weight=0.65 2009 Weight=0.35 0.15 1.75 2010 5.21 1.12 2011 7.23 0.25 2012 1.22 6.32 2013 3.22 3.12 2.25 2014 0.25 (1) Calculate the correlation coefficient between Stock A and Stock B. (1 mark) (ii) Calculate the portfolio standard deviation using the above data, (3 marks) (iii) Will this portfolio selection reduce the risk efficiently? Please explain. (0.5+2.5 + 3 marks) (b) According to the capital asset pricing model the expected return on shares in the Gamma Corporation 's 106 . The beravalue associated with these shares s asians the rich free me of interest is 49%, Given this information, calculate the market risk premium and the expected return on the market pardichic? (3 marks) 9 N 0