Shares for ZCCM Investment Holdings (IH) and ZAFFFICO have the following historical dividend and price data.

Companies	ZCCM-IH Share		ZAFFICO Share
Year	Dividend	Year-end Price	Dividend	Year-end Price
2012		22.50		43.75
2013	2.00	16.00	3.40	35.50
2014	2.20	17.00	3.65	38.75
2015	2.40	20.25	3.90	51.75
2016	2.60	17.25	4.05	44.50
2017	2.95	18.75	4.25	45.25

Required: (a) Calculate the realized rate of return (or holding period return) for each share in each year. Assume an equally weighted portfolio. What would the realized rate of return on the portfolio be in each year from 2012 through to 2017? What are the average returns for each share and for the portfolio?

(b) Calculate the standard deviation of returns for each share and for the portfolio.

(c) Based on the extent to which the portfolio has a lower risk than the shares held individually, would you assess that the correlation co-efficient between returns on the two shares is closer to 0.9, 0.0 or -0.9?

(d) If you added more shares at random to the portfolio, what is the most accurate statement of what would happen to p?

(i) p would remain constant, or

(ii) p would decline to somewhere in the vicinity of 15%, or

(iii) p would decline to zero if enough shares were included.