You work for a large investment management firm. The analysts with your firm have made the

following forecasts for the returns of stock A and stock $B$ :

a$)$ Calculate the expected returns, variances and the standard deviations for Stock A and Stock

B$.$

b$)$ What is the covariance of returns for Stock A and Stock B$?$ What is the correlation coefficient

between the returns of Stock A and Stock B$?$

c$)$ What is the expected return and standard deviation of a portfolio where $30\%$ of the portfolio

is in stock A and $70\%$ of the portfolio is in stock B$?$

d$)$ Create a table $($like the one shown below$)$ that has the expected return and standard deviation

for different weights in each stock. This can be done using an excel data table. Start with $100\%$

in A and zero in B$,$ and increments of $10\%,$ complete the table. The last row, will have $0\%$ in

A and $100\%$ in $B.$

e$)$ Based on your table, create a chart $($or graph$)$ with your results.

Note: All calculations should be rounded to one decimal place if you are using percentages. If you

are using decimals, the answer should be rounded to two decimal places.