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Q 1 . As a new analyst you have calculated the following annual rates of return for the stocks of both Lauren Corporation and Raleigh

Q1. As a new analyst you have calculated the following annual rates of return for the stocks of both
Lauren Corporation and Raleigh Industries
(i) Compute average return, standard deviations, coefficient of variation co-variances and
correlations of the two stocks
(ii) Would a combination of Lauren and Kaleigh be good for diversification?
(iii) Graph risk return relationship
(iv) Identify minimum variance portfolio and optimal tangency portfolio if the risk free rate
is 3%
(v) Graph risk return relationship of
a. Risk free with minimum variance portfolio
b. Risk free with optimal portfolio
c. Risk free with Lauren
d. Risk free with Kayleigh
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