Calculate the given statistics for the two shares

Reference no: EM131477243

Question: The table below presents the year-end prices for the shares of Ford and PPG from 1989 to 2001:

a. Calculate the following statistics for these two shares: average return, variance of returns, standard deviation of returns, covariance of returns and correlation coefficient.

b. If you invested in a portfolio composed of 50% Ford and 50% PPG, what would be the portfolio expected return? the standard deviation?

c. Comment on the following statement: "Ford has lower returns and higher standard deviation of returns than PPG. Therefore any rational investor would invest in PPG only and would leave Ford out of her portfolio."

Reference no: EM131477243

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