If you have 3 stocks (A), (B), & (C). The following are the rates of returns in the last 5 years for the three stocks:

Stock A

Stock B

Stock C

30

60

20

20

35

30

40

20

40

25

25

35

35

20

40

Required

1-Calculate the expected returns for individual stocks A, B & C.

2-Calculate the expected risk for individual stocks A, B & C.

3-Calculate the covariance and correlation between A&B stocks and A&C stocks

4-If you decide to construct a portfolio that consist of 40 % for stock (A) & 60% for the selected stocks (B or C). Which portfolio would you choose? Why?