1. We have the following monthly stock returns for Stocks A and B. Assume the likelihood for each pair to happen is equal, i.e., no need to do (n-1) adjustment. Calculate covariance and correlation coefficient. Show key steps of your work. No Excel.

2. . what is the difference between covariance and correlation.

3. If the correlation coefficient is 0 between 2 variables, what does it mean?

Month	Stock A	Stock B
1	2%	3%
2	1%	0%
3	4%	5%
4	1%	4%