The past four years of stock returns for WOW and COL The correlation between WOW and COL is 0.4

1. What is the average annual return for WOW and COL?

2. What is the standard deviation of return for WOW and COL?

3. Which stock would you invest? Explain.

4. Given thee expected return for WOW and COL calculated in part(a),what would be

   your portfolio return and standard deviation if you invested 50% of your capital in

   WOW and the remaining 50% in COL?

5. What if you increase your capital invested in WOW from 50% to 75%? What is your portfolio return and standard deviation? Is this more or less favourable?Explain

Year 2017 2018 2019 2020 WOW COL 3.40% 9.10% 5.80% -6.80% 7.60% 18.50% 2.30% -8.80%