Calculate covariance and correlation

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Reference no: EM133290554

Based on the following table.

Prob. Ret(A) Ret(B)
10% -5.00% -2.00%
20% 0.00% 1.00%
40% 5.00% 3.00%
20% 10.00% 4.00%
10% 15.00% 5.00%

Question 1: Please calculate covariance and correlation between A and B.

Question 2: Please calculate the variance of a portfolio consisting of 45% of A and 55% of B.

Question 3: Please find the optimal portfolio (calculate WA and WB) corresponding to 4% of return.

Reference no: EM133290554

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