Calculate the observed covariance of returns

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Problem 1: The historical returns for the past three years for Stock B and the stock market portfolio were Stock B: 24 percent, 0 percent, 24 percent; market portfolio: 10 percent, 12 percent, 20 percent. Calculate the observed covariance of returns between Stock B and the market portfolio. (Ignore the correction for the loss of a degree of freedom set out in the text.)

Option 1: 16
Option 2: 28
Option 3: 36
Option 4: 292

Reference no: EM132907866

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