The following information relates to the prices and dividends of two stocks listed on the Ghana Stock Exchange as well as the average market returns.

Stock A Stock B

year Price Div. Price Div Market return

2011 20 0 11 0 0

2012 24 1.2 13 1.6 0.25

2013 26 0.5 17 0.5 0.18

2014 31 1 20 0.9 0.11

2015 33 1.5 23 1.2 0.12

2016 40 2 27 1.5 0.15

Required.

a.Calculate the annual returns for each stock (2012-2016)

b.Calculate the average returns for each of the stocks and the market

c.Calculate the covariance between the stocks

d.Assuming the two stocks are equally weighted, calculate the portfolio return and portfolio risk