For the next three questions (34-36), assume that we now hold a portfolio of three stocks: RIM, ENCANA and Reitmans. The relevant information includes:

	RIM	ENCANA	Reitmans
Arithmetic Mean	6%	22%	14%
Standard Deviation	75%	20%	20%
Proportion of Portfolio	40%	30%	30%
Correlation: RIM & ENCANA	0.00
Correlation: RIM & Reitmans	-0.25
Correlation: ENCANA & Reitmans	-0.30

34. What return would you expect next year for a portfolio comprised of 40% RIM, 30% ENCANA and 30% Reitmans?

A) 13.2%

B) 19.8%

C) 19.0%

D) 16.4%

35. Using the Variance/Covariance matrix provided on the last page of the formula sheet, calculate the standard deviation of the portfolio (comprised of 40% RIM, 30% ENCANA and 30% Reitmans)

A) 29%

B) 24%

C) 18%

D) 36%

36. Which stock adds the most risk to the portfolio?

A) Reitmans

B) RIM

C) None of the Above

D) ENCANA