Portfolio return and standard deviation Jamie Wong is thinking of building an investment portfolio containing two

exchange traded funds $($ETFs$).$ Jamie plans to invest $$2,000$ in Vanguard S&P $500$ ETF $($VOO$)$ and $$8,000$ 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: $.$

a$.$ Calculate the portfolio return, $r_p,$ for each of the $6$ years assuming that $20\%$ is invested in VOO and $80\%$ 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.

Data table

$($Click on the icon here in order to copy the contents of the data table below

into a spreadsheet.$)$