1. Following are annual return statistics for two mutual funds from Vanguard as of December 31 of each year:

Vanguards Windsor Fund, an aggressive growth fund:

1997 22.00%; 1996 26.40%; 1995 30.10%; 1994 -0.10%

1993 19.40%; 1992 16.50%; 1991 28.60%; 1990 -15.50%

1989 15.00%; 1988 28.70%; 1987 1.20%; 1986 20.30%

1985 28.00%; 1984 19.50%

Vanguards Index 500 Fund, an S&P 500 Tracking Index Fund

1997 33.40%; 1996 23.00%; 1995 37.60%; 1994 1.30%;

1993 10.10%; 1992 7.60%; 1991 30.50%; 1990 -3.10%;

1989 31.70%; 1988 16.60%; 1987 5.30%; 1986 18.70%;

1985 31.80%; 1984 6.30%;

1. Report the average return, sample standard deviation, and sample covariance of returns for the two funds.
2. Report the expected portfolio return, sample variance of portfolio return, and sample standard deviation of portfolio returns based on a portfolio made up of 25% of the SP500 fund and 75% of Windsor.
3. Use Excel to graph the combination of standard deviation of return (x-axis) and expected return (y-axis) from varying the percentage of Index 500 Fund in the portfolio from 0% to 100% in 10% increments.