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Given the monthly rate of return for two assets during a six-month period in Table 1. Compute the following: A. (10pt) Average monthly rate of
Given the monthly rate of return for two assets during a six-month period in Table 1. Compute the following: A. (10pt) Average monthly rate of Eri ) for each asset. B. (Spt) Standard deviation of returns for each asset. .C. (Spt) Covariance between the rates of return. D. (5pt) The correlation coefficient between the rates of return E. (20pt) Draw the figure of opportunity set with in {0, 0.1, 0.2, 0.3, 0.4, 0.5, 0.6, 0.7, 0.8, 0.9, 1.0) F. (pt) Would these two assets offer a good change for risk reduction? Why or why not? Table 1: Month Asset 1 1 2 3 4 5 6 -0.04 0.06 -0.07 0.12 -0.02 0.05 Asset 2 -0.01 0.08 0.10 -0.15 0.06 -0.02 Table 1: The table for question 5
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