Question

Shares A and B have the following​ returns:

	Stock A	Stock B
1	0.08	0.06
2	0.06	0.04
3	0.12	0.05
4	−0.05	0.03
5	0.09	−0.02

a. What are the expected returns of the two​ shares?

b. What are the standard deviations of the returns of the two​ shares?

c. If their correlation is

0.44​,

what is the expected return and standard deviation of a portfolio of

52​%

share A and

48​%

share​ B?

Answer 1

calculations-

Note-
Average Return = Sum of returns/ No. of years
Variance = Sum of (Return - Avg return )^2 /(No. of years -1)
Standard deviation = Squareroot (Variance)

Please upvote if the ans is helpful.In case of doubt,do comment.Thanks.