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Using the data in the following table, estimate (1.) the covariance between the stocks, (2.) the correlation between these two stocks, and (3.) the volatility
Using the data in the following table, estimate (1.) the covariance between the stocks, (2.) the correlation between these two stocks, and (3.) the volatility of a portfolio that is 70% invested in stock A and 30% invested in stock B. (1., 2., 3.) Year 2016 2017 2018 2019 2020 2021 Stock A -10% 20% 5% -5% 2% 9% Stock B 21% 7% 30% -3% -8% 25% O (0.104%, 6.27%, 4.51%) O (0.104%, 6.27%, 9.02%) O (0.208%, 6.27%, 9.02%) O (0.208%, 6.27%, 9.02%) O (0.104%, 7.81%, 8.07%)
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