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Question 3 (1 point) Question 3 (20 points) The following table presents historic returns of Aloan and Bombardier. Period Alcan Bombardier -14% 14% 2 24%

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Question 3 (1 point) Question 3 (20 points) The following table presents historic returns of Aloan and Bombardier. Period Alcan Bombardier -14% 14% 2 24% -11% 3 18% 19% 32% 22% 4 a. Calculate the expected returns of both assets. (4 points) b. Calculate the standard deviations of both assets. (5 points) c. Calculate the covariance and the coefficient of correlation between the 2 assets. (5 points). d. Mrs Langley would like to have an expected return of 13% on her investment. What would be the portfolio composition you would offer to this investor? Calculate the standard deviation of this portfolio. (6 points)

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