Intro

The following table shows historical beginning-of-year adjusted close prices for two stocks.

	A	B	C
1	Year	Stock A	Stock B
2	2010	30.78	574.59
3	2011	27.46	535.66
4	2012	32.84	554.56
5	2013	39.12	574.44
6	2014	37.82	569.49
7	2015	33.05	633.27
8	2016	37.58	664.59
9	2017	45.61	762.61
10	2018	54.49	845.99

Attempt 1/10 for 12 pts.

Part 1

Calculate the annual returns. What is the correlation coefficient?

Attempt 1/10 for 12 pts.

Part 2

Assume that the historical average returns, standard deviations and covariance will hold into the future. What is the Sharpe ratio of the optimal risky portfolio?