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Historical returns of two stocks (Blandy and Gourmange), and the entire market are given below. 1) Estiamte the risk and expected returns for the

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Historical returns of two stocks (Blandy and Gourmange), and the entire market are given below. 1) Estiamte the risk and expected returns for the following: Only Blandy, 2Only Gourmange and Portfolio of Blandy 75% and Gourmange 25%. 2) What is the correlation between these two assets. What's its importance? Year Mean Standard dev 1 2 3 4 5 6 7 8 9 10 Correlation (B, G) Blandy Gourmange Market Portfolio (75/25) 26% 30% 15% 7% -14% 18% -15% -22% 2% -14% -18% 10% 42% 26% 30% -10% -32% -3% 28% 38% 6.4% 25.2% 47% -54% 15% 7% -28% 40% 17% -23% -4% 75% 9.2% 38.6% 8.0% 20.1%

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