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You are a financial advisor at Supreme Corp. An investor, David Kimberly, came to you for stock advice. He is currently interested in 4 stocks,

You are a financial advisor at Supreme Corp. An investor, David Kimberly, came to you for stock advice.

He is currently interested in 4 stocks, the monthly returns of these stocks along with a market index are given as below

Stock A Stock B Stock C Stock D Market Index
-3.67% 1.93% -0.66% 0.51% 0.08%
1.26% -1.11% 0.17% -0.35% 1.16%
0.31% 2.47% -0.68% -0.85% -0.39%
7.29% 2.83% 0.25% 0.25% 0.71%
2.59% 1.88% -1% -0.34% 0.65%

Assume a single index structure (use R only):

1) give an estimate of the expected rate of returns, variances and covariances using unbiased estimates for each of the four stocks and the market index

2) Compare and comment on the four stocks

3) If David Kimberly is interested in purchasing one single stock only, which one would you suggest? Explain

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