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The returns for AAA from 2017 to 2021 are shown as follows: Suppose the observations are independent, what is the expected return? Suppose the observations

The returns for AAA from 2017 to 2021 are shown as follows:

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Suppose the observations are independent, what is the expected return?

Suppose the observations are independent, what is the volatility of this security?

Consider two funds, the volatility of fund 1 is 26% and that of fund 2 is 30%. The CORRELATION between the two funds is 0.6. What is the variance of a portfolio made up of 39% fund 1 and 61% fund 2?

Year 2017 2018 2019 2020 2021 Realized Return 26.5% 15.1% 2.1% 16.0% 32.4%

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