QUESTION 4

States below are the returns for DEQLA Corporation and KYRA Holding :

Conditions	Probability	DEQLA CORP. (%)	KYRA HOLDING (%)
1	0.30	16	19
2	0.25	14	-18
3	0.25	-15	12
4	0.20	18	20

a.

Expected return for each company.

(4 marks)

b.

Standard deviation for each company.

(6 marks)

c.

Covariance of returns between the two companies.

(6 marks)

d.

Correlation coefficient of stocks DEQLA Corp. and KYRA Holding.

(4 marks)

(Total 20 marks)