Question

	Young Corp.	Mature Corp.
	Share price	Share price	Dividend per share
31-Dec-05	32.56	78.50	0.00
31-Dec-06	34.50	82.50	0.00
31-Dec-07	38.98	84.50	1.00
31-Dec-08	44.50	81.60	0.00
31-Dec-09	40.20	79.60	1.50
31-Dec-10	39.50	80.96	1.50
31-Dec-11	38.45	82.65	0.00
31-Dec-12	37.50	83.69	2.00
31-Dec-13	43.58	82.79	2.00
31-Dec-14	50.30	81.97	0.00
Part A. Compute returns for both companies
	Young Corp.	Mature Corp.
31-Dec-06
31-Dec-07
31-Dec-08
31-Dec-09
31-Dec-10
31-Dec-11
31-Dec-12
31-Dec-13
31-Dec-14
Part B. Calculate the following statistics
Average return
Variance
Sigma
Covariance
Correlation
Part C. Interpret the economic meaning of correlation

Answer 1