Probability Return of Stock A Return of Stock B Market 40% 15% 10% 20% 35% 10% 15% 10% 25% 5% 20% 8% Calculate expected return of stock A. Calculate expected return of stock B. Calculate standard deviation of stock A. Calculate standard deviation of stock B. Calculate covariance between stock A and B and comment.

Calculate correlation between stock A and B and comment. Assume that out of $55,000 total investment you have invested $22,000 in stock B and remaining amount in Stock A. Calculate portfolio expected return (approximate). Calculate portfolio standard deviation (approximate). Calculate Beta for Stock A (approximate). 0.69 -0.66 0.35 None of the above if beta value of stock B is -1.18 calculate portfolio beta and comment on it. -0.0756 means portfolio return is opposite to market 0.0756 means portfolio return is same as market -0.058 means portfolio is opposite to the market 0.256 means portfolio is less risky than market Suppose you want to form a portfolio with Stock A and B with a portfolio beta 15% less risky than the market.

Calculate weights for Stock A and Stock B. Wa = 1.08; Wb = -0.08 Wa = -0.26; Wb = 1.26 Wa = -0.18; Wb = 1.18 Wa = 1.26; Wb = -0.26