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The following table shows Company EduCom and AppRun monthly return along with market return in five-month period: Month Market Stock AppRun Stock EduCom Return 1

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The following table shows Company EduCom and AppRun monthly return along with market return in five-month period: Month Market Stock AppRun Stock EduCom Return 1 -0.037 -0.01 0.032 2 0.026 0.15 0.030 0.027 0.2 0.017 4 0.016 0.05 0.025 5 0.024 0.08 0.035 3 a) Calculate expected returns of both stocks, which one has higher expected return? b) Calculate the standard deviations of both stocks, which one has higher risk? c) Calculate the correlation coefficient of the two stocks and decide if the risk of the portfolio can be reduced with these two stocks in the same portfolio. d) Calculate Beta of both Stocks and interpret the results. e) If the market return is the x variable, AppRun stock is the y variable, write the equation of the line of best fit between these 2 variables. The following table shows Company EduCom and AppRun monthly return along with market return in five-month period: Month Market Stock AppRun Stock EduCom Return 1 -0.037 -0.01 0.032 2 0.026 0.15 0.030 0.027 0.2 0.017 4 0.016 0.05 0.025 5 0.024 0.08 0.035 3 a) Calculate expected returns of both stocks, which one has higher expected return? b) Calculate the standard deviations of both stocks, which one has higher risk? c) Calculate the correlation coefficient of the two stocks and decide if the risk of the portfolio can be reduced with these two stocks in the same portfolio. d) Calculate Beta of both Stocks and interpret the results. e) If the market return is the x variable, AppRun stock is the y variable, write the equation of the line of best fit between these 2 variables

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