The following are monthly percentage price changes for three market indexes

Month	Index A	Index B	Index C
1	0.04	0.015	0.05
2	0.06	0.07	0.12
3	-0.01	-0.015	-0.035
4	0.02	0.04	0.035
5	0.07	0.05	0.12
6	-0.03	-0.03	-0.06

Calculate the following:

1. Average monthly rate of return for each index

(2 marks)

2. Standard deviation for each index

(2 marks)

3. The correlation coefficients for different combinations of the indexes. (2 marks)

4. Using answers in a), b), and c), calculate the expected return and standard deviation of a portfolio consisting of equal parts of A and C and then B and C. Comment on your results.

(6 marks)

5. Use relevant examples and numerical illustrations to show why an investor would invest in the market portfolio and not one of the individual stocks.

(8 marks)

6. Use contemporary real-life examples to distinguish between Systematic and unsystematic risks.