You are given with the following information on your portfolio: you have a $6million portfolio that consists of two funds. The historical daily rates of return for these assets are shown in the following table. That is, these are the sampled 7-day observations from the daily rates of return for the funds and applied for estimates for the volatility.

Fund1	12.5%	-9.75%	17.92%	11.07%	8.19%	19.45%	-7.16%
Fund2	-3.74%	14.59%	21.49%	21.7%	6.38%	22.16%	-9.41%

Answer the following questions:

1) Find estimates for the volatility of each fund (in terms of standard deviation) on the samples given above.

2) Suppose you own $2 million worth of fund 1, what is the 7-day (95%-confidence) VaR for this fund if normal distribution is assumed?

3) Suppose you own $4 million work of fund 2, what is the 7-day (95%-confidence) VaR for this fund?

4) Let the correlation coefficient between these two funds be 0.67. What is the 7-day 95%VaR for your portfolio with the above allocation in fund 1 and fund 2?

5) Now suppose you have 40% of wealth on Fund 1 and 60% on Fund 2. Let the rates of return be randomly re-sampled (Lets assume there are 15 replications). What is your possible estimate for the 95%-confidence VaR now?