You have the following return distribution two stocks and the market. Time Period 2 Rate of return Stock B 17% 12% -8% 0% -2% Stock A 8% 11% 14% 12% 16% 3 Market 10% 9% 8% 9% 12% 4 5 a. What is the average return, standard deviation of each item? b. What is the covariance of A and B with the market? What are their betas? c. You are 60% invested in A and 40% invested in B. what would be the expected return of this combination if the market is expected to return 9.5% and the risk-free rate is 2%? d. Why would you include all these in your portfolio? Explain intuitively by looking at the data relationships. You have the following return distribution two stocks and the market. Time Period 2 Rate of return Stock B 17% 12% -8% 0% -2% Stock A 8% 11% 14% 12% 16% 3 Market 10% 9% 8% 9% 12% 4 5 a. What is the average return, standard deviation of each item? b. What is the covariance of A and B with the market? What are their betas? c. You are 60% invested in A and 40% invested in B. what would be the expected return of this combination if the market is expected to return 9.5% and the risk-free rate is 2%? d. Why would you include all these in your portfolio? Explain intuitively by looking at the data relationships