Question 1 Over a 5-year period, an equally weighted portfolio is formed on four stocks with information given as follows:- Year Return on Return on Return on Return on Stock A(%) Stock B (%) Stock C (%) Market (% 1 12 27 17 12 2 30 16 8 16 3 25 18 24 14 4 20 28 25 20 10 5 10 26 30 116 a. Form the variance-covariance matrix of the stocks. (4 marks) b. Compute the annual average return and variance of the portfolio using the markowitz's methodology. (7 marks) c. Compute a and B for each stocks and for portfolio. (6 marks) d. Compute variance portfolio using Sharp's methodology. (8 marks) TOTAL 25 MARKS Question 1 Over a 5-year period, an equally weighted portfolio is formed on four stocks with information given as follows:- Year Return on Return on Return on Return on Stock A(%) Stock B (%) Stock C (%) Market (% 1 12 27 17 12 2 30 16 8 16 3 25 18 24 14 4 20 28 25 20 10 5 10 26 30 116 a. Form the variance-covariance matrix of the stocks. (4 marks) b. Compute the annual average return and variance of the portfolio using the markowitz's methodology. (7 marks) c. Compute a and B for each stocks and for portfolio. (6 marks) d. Compute variance portfolio using Sharp's methodology. (8 marks) TOTAL 25 MARKS