Questions 1 to 4:

Celestila Moonn is an Equity analyst at QAR. Based on the following quantitative analysis (Tables 1, 2, 3 and 4), Moon was asked to calculate expected returns, variance, covariance, correlation, portfolio standard deviation and expected portfolio return.

UMB Trust -Table - 1
Probability	Return
25%	-8%
40%	20%
35%	25%

UMB Trust -Table - 2
Period	Return
2013	17%
2012	-5%
2011	-19%
2010	22%

Table -3
	Expected Return	Standard Deviation	Weight
UMA, Inc.	15%	0.18	0.65
UMD, Inc.	8%	0.25	0.35
The correlation between UMA and UMD is 0.25.

Moon was asked to create a portfolio from the below stocks. The following data is available for the stocks:

Table 4
	UMA, Inc.	UMD, Inc.
Standard Deviation	19%	14%
Recommended weighting	40%	60%
2013 Return	-22%	12%
2012 Return	10%	7%
2011 Return	9%	3%

Based on data on Table 1, Moonn Calculated the expected return for UMB Trust:

A.

14.75%

B.

14%

C.

13.85%

QUESTION 2

1. Based on historical returns on Table 2, Moonn calculated variance of historical returns for UMB Trust:

	A.	3.68%			B.	2.76%			C.	3.75%

QUESTION 3

1. Using the Table 1 data, Moon Calculated the expected Standard deviation of return for UMB Trust:

A.

13.31%

B.

7.69%

C.

14.75%

QUESTION 4

1. Moonn created a portfolio of two security, UMA and UMD. Based on the information on the Table 3, Moonn calculated the expected return and standard deviation of the UMA and UMD portfolio: .

A.

Expected Return	Standard Deviation
16.72%	13.59%

B.

12.55%

16.27%

C.

16.27%

12.55%