1 Consider the following returns: Year End Stock Y Realized Return Stock Z Realized...

1 Consider the following returns:

Year End Stock Y Realized Return Stock Z Realized Return

2004 -14.6% 0.2%

2005 4.3% -3.2%

2006 -58.1% -27.0%

2007 71.1% 27.9%

2008 17.3% -5.1%

2009 0.9% -11.3%

Calculate the variance and expected return on a portfolio that is made up of equal investments in Stock Y and Stock Z stock.

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