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You are considering investing in three different stocks. Being a conservative investor, you are able to obtain returns data for the three stocks for the
You are considering investing in three different stocks. Being a conservative investor, you are able to obtain returns data for the three stocks for the years 2014 through to 2020. The data is summarised below:
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Year | Stock A | Stock B | Stock C |
2014 | 10% | 12% | 25% |
2015 | 13% | 14% | 20% |
2016 | 15% | 10% | 22% |
2017 | 14% | 11% | 18% |
2018 | 16% | 9% | 17% |
2019 | 14% | 9% | 18% |
2020 | 12% | 10% | 16% |
Calculate the covariance between A and B, A and C, and B and C. 5 marks
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