Question No $1$:

$($i$)$

You are thinking about a portfolio where you put half your money in stock A$,$ with returns $8\mathrm{.}67\%,$

and half your money in the risk free asset $($like a Treasury bill$).$ The risk$-$free asset has a return of

$5\%.$

a$.$ What is the variance and standard deviation of the risk$-$free asset?

b$.$ What is the covariance between stock A and the risk$-$free asset?

c$.$ What is the expected return on your portfolio?

d$.$ What is the variance on your portfolio?

e$.$ What is the standard deviation on your portfolio?

$($ii$)$ What are Financial Risk Management Strategies? Discuss some of the risk management

strategies in corporations, financial institutions, and individuals?