the questions about risk and return. pleaseshow the calculationsteps.

Risk and Return: Your grandfather is planning to invest $25,000 into the following stocks: Rio Tinto Ltd Cathay Pacific Airlines The table below shows the closing prices between 2008 and 2014. Rio Tinto (RIO.AX) Ltd Cathay Pacific Airlines (0293.HK) December 2008 $29.97 $8.72 December 2009 $74.89 $14.48 December 2010 $85.47 $21.45 December 2011 $60.3 $13.32 December 2012 $66.01 $14.22 December 2013 $68.18 $16.4 December 2014 $58 $16.9 The monthly data is collected from Yahoo Finance on 1 st of November 2015. a) 4 marks For each stock, show the annual stock returns. b) 4 marks Based on the annual stock returns, calculate the average stock returns and standard deviation for each stock. c) 4 marks Calculate the covariance and correlation of annual stock returns between these stocks. d) 4 marks The risk-free rate is 2.06% per annum. Calculate the Sharpe ratio for Rio Tinto Ltd and Cathay Pacific Airlines. Which stock is performing better? Explain your answer. e) 4 marks Suppose grandfather invests 60% in Rio Tinto and 40% in Cathay Pacific Airlines, calculate the expected return and standard deviation for this portfolio. Is this portfolio perform better than the individual stock