Suppose the return for stocks A and B for the last six months
have been the following:
A. B
3,2% 4,7%
4,1% 2,0%
-2,7% 1,4%
-0,5% -0,8%
6,7% 2,7%
5,5% -1,2%
a. What is the expected return, variance and standard deviation
of the two stocks? What is the covariance and correlation among
them?
b. What would the return and standard deviation of a portfolio
that is 30% invested in stock A and 70% invested in stock B be?