Question 1 The following historic data provides information on shares in Garbage pic and Trash Inc. "State of the Probability of s, Return on world" (s) P. Garbage plc 1 0.15 -0.05 Return on Tras *** Inc -0.07 2 0.35 0.05 0.05 3 0.3 0.07 0.10 4 0.2 0.10 0.12 a) What is the expected return and risk (measured by standard deviation) for each of these companies? b) What is the covariance and correlation coefficient between the returns on these two companies' shares? c) Would you recommend a portfolio consisting of only these two companies with Garbage accounting for 65% of the total portfolio? Explain fully Reply... Question 1 The following historic data provides information on shares in Garbage pic and Trash Inc. "State of the Probability of s, Return on world" (s) P. Garbage plc 1 0.15 -0.05 Return on Tras *** Inc -0.07 2 0.35 0.05 0.05 3 0.3 0.07 0.10 4 0.2 0.10 0.12 a) What is the expected return and risk (measured by standard deviation) for each of these companies? b) What is the covariance and correlation coefficient between the returns on these two companies' shares? c) Would you recommend a portfolio consisting of only these two companies with Garbage accounting for 65% of the total portfolio? Explain fully Reply