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Question No: 02 The table below gives the monthly rate of return for Jyoti Chemicals Ltd. and Simhachalam Prints Ltd. during a six month period:
Question No: 02 The table below gives the monthly rate of return for Jyoti Chemicals Ltd. and Simhachalam Prints Ltd. during a six month period: Month Jyoti Chemicals Ltd. Simhachalam Prints Ltd. 1 -6% 7% 2 9% -4% 3 -5% -12% 4 12% 15% 5 -2% 6% 6 7% 4% Compute the average monthly rate of return and standard deviation for each of above stocks. Also compute the covariance and correlation coefficient between the rates of return of the two stocks. Calculate the expected return and standard deviation of a portfolio consisting of 45% in Jyoti Chemicals Ltd. and 55% in Simhachalam Prints Ltd. [10]
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