Question

In: Finance

The annual returns of three stocks for the past seven years are given in the following...

  1. The annual returns of three stocks for the past seven years are given in the following table:

Year

Stock X

Stock Y

Stock Z

2011

3.00%

14.00%

19.00%

2012

9.00%

7.00%

11.00%

2013

12.00%

19.00%

5.00%

2014

19.00%

13.00%

12.00%

2015

23.00%

-7.00%

11.00%

2016

5.00%

-3.00%

7.00%

2017

10.00%

9.00%

14.00%

  1. Determine the average return and the standard deviation of returns for each stock. Which stock has the highest expected return and which one has the highest risk?
  2. Determine the correlation coefficient and the covariance between each pair of stocks.

Solutions

Expert Solution

standard deviation ,covariance and correlation coefficient are rounded to two decimals

jeff jeffy answered 4 months ago
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