QUESTION 1

1. HAND CALCUALTION OR SPREADSHEET ANALYSIS. For this and the next 3 questions. Please use the following data to answer the questions that follow. Calculate the covariance of Stock A and the Market. If you wish, copy over the data to Excel and use spreadsheet functions to perform the analysis. Be sure to correct for sample.

   Year	Market	Stock A	Stock B
   1	0.03	0.16	0.05
   2	-0.05	0.20	0.05
   3	0.01	0.18	0.05
   4	-0.10	0.25	0.05
   5	0.06	0.14	0.05

   		-0.0154
   		-0.00268
   		0.00415
   		0.00178
   		0.00000
   		None of the above

1 points

QUESTION 2

1. What is the covariance of Stock B and the Market.

   		-0.0154
   		-0.00268
   		0.00415
   		0.00178
   		0.00000
   		None of the above

1 points

QUESTION 3

1. What is the variance of Stock A?

   		-0.0154
   		-0.00268
   		0.00415
   		0.00178
   		0.00000
   		None of the above

1 points

QUESTION 4

1. Suppose you invest 45 percent of your funds in Stock B and the rest in Stock A. Calculate the standard deviation of a portfolio of the two stocks.

   		0.02320
   		0.04219
   		0.00415
   		0.00
   		None of the above