Problem 28

Intro

The following table shows realized rates of return for three stocks.

	A	B	C	D
1	Year	Stock A	Stock B	Stock C
2	1	5%	15%	13%
3	2	-25%	-14%	2%
4	3	-6%	-4%	1%
5	4	5%	28%	8%
6	5	14%	8%	9%
7	6	5%	5%	5%

Attempt 1/10 for 10 pts.

Part 1

What is the arithmetic average return for stock C?

Attempt 1/10 for 10 pts.

Part 2

What is the variance for stock C?

Attempt 1/10 for 10 pts.

Part 3

What is the covariance of returns for stocks B and C?

Attempt 1/10 for 10 pts.

Part 4

What is the mean return of a portfolio with 40% invested in stock A, 30% in stock B and the remainder in stock C?

Attempt 1/10 for 10 pts.

Part 5

What is the standard deviation of a portfolio with 40% invested in stock A, 30% in stock B and the remainder in stock C?