Portfolio return and standard deviation

Jamie Wong is thinking of building an investment portfolio containing two exchange traded funds (ETFs). Jamie plans to invest $7,500 in Vanguard S&P 500 ETF (VOO) and $2,500 in Invesco QQQ Trust (QQQ). Jamie has decided to analyze some historical returns to get a sense for her portfolio's possible future risk and return. Six years of historical annual returns for each ETF are shown in the following table:

	Historical return
Year	VOO		QQQ
2014	14.08%		18.51%
2015	1.66%		9.55%
2016	12.29%		7.85%
2017	22.95%		33.82%
2018	4.01%		1.23%
2019	31.72%		38.11%

a.Calculate the portfolio return, rp, for each of the 6 years assuming that 75% is invested in VOO and 25% is invested in QQQ.

b. Calculate the average annual return for each ETF and the portfolio over the six-year period.

c. Calculate the standard deviation of annual returns for each ETF and the portfolio. How does the portfolio standard deviation compare to the standard deviations of the individual ETFs?

d.Calculate the correlation coefficient for the two ETFs. How would you characterize the correlation of returns of the two ETFs?

e. Discuss any likely benefits of diversification achieved by Jamie through creation of the portfolio.

a. The portfolio return for year2014 is ?%. (Round to two decimal places.)

b. ?

c. ?

d. ?

e ?