Please answer the following questions, showing all work accordingly on all sections. Thank you.

Part A

Please answer, rounding to three decimal places. Thank you.

Part B

Please answer, rounding to two decimal places. Thank you.

a. What are the expected returns of the two stocks? b. What are the standard deviations of the returns of the two stocks? c. If their correlation is 0.47, what is the expected return and standard deviation of a portfolio of 57% stock A and 43% stock B? \begin{tabular}{|c|r|r|r|} \hline 1 & & Stock A & Stock B \\ \cline { 2 - 4 } 2 & 1 & 0.08 & 0.06 \\ \hline 3 & 2 & 0.06 & 0.02 \\ \hline 4 & 3 & 0.13 & 0.05 \\ \hline 5 & 4 & 0.02 & 0.03 \\ \hline 6 & 5 & 0.08 & 0.02 \\ \hline 7 & & & \\ \hline \end{tabular} The following spreadsheet contains monthly returns for Cola Co. and Gas Co. for 2013. Using these data, estimate the average monthly return and the volatility for each stock. (Click on the following icon in order to copy its contents into a spreadsheet.) \begin{tabular}{c|l|r|r|} & \multicolumn{2}{c|}{ A } & \multicolumn{1}{c|}{ B } \\ \cline { 2 - 4 } 1 & & Cola Co. (\%) & Gas Co. (\%) \\ \cline { 2 - 4 } 2 & January & 0.099 & 0.044 \\ \hline 3 & February & 0.016 & 0.056 \\ \hline 4 & March & 0.042 & 0.013 \\ \hline 5 & April & 0.026 & 0.02 \\ \hline 6 & May & 0.091 & 0.016 \\ \hline 7 & June & 0.082 & 0.038 \\ \hline 8 & July & 0.12 & 0.047 \\ \hline 9 & August & 0.007 & 0.004 \\ \hline 10 & September & 0.07 & 0.009 \\ \hline 11 & October & 0.012 & 0.004 \\ \hline 12 & November & 0.092 & 0.102 \\ \hline 13 & December & 0.011 & 0.055 \\ \hline \end{tabular} 14