Reference no: EM131970531

1. Returns on stocks X and Y are listed below:

Period 1 2 3 4 5 6 7

Stock X 3% -2% 9% 6% -1% -4% 11

Stock Y 1% -4% 7% 12% 3% -2% -1%

What is the (population) covariance of returns on the two stocks?

Please round your answer to six decimal places.

Note that the correct answer will be evaluated based on the full-precision result you would obtain using Excel.

2. Returns on stocks X and Y are listed below:

Period 1 2 3 4 5 6 7

Stock X 5% 6% -2% -4% 6% 10% 7%

Stock Y 1% -3% 6% 3% 12% 7% -5%

Consider a portfolio of 40% stock X and 60% stock Y.

What is the mean of portfolio returns?

Please specify your answer in decimal terms and round your answer to the nearest thousandth (e.g., enter 12.3 percent as 0.123).

3. Returns on stocks X and Y are listed below:

Period 1 2 3 4 5 6 7

Stock X 8% 0% 3% -2% 5% 12% 7

Stock Y 5% -2% 4% 7% 1% 12% -3%

Consider a portfolio of 10% stock X and 90% stock Y.

What is the (population) standard deviation of portfolio returns?

Please specify your answer in decimal terms and round your answer to the nearest thousandth (e.g., enter 12.3 percent as 0.123).

Note that the correct answer will be evaluated based on the full-precision result you would obtain using Excel.

4. Summary statistics for returns on two stocks X and Y are listed below.

Mean Variance

Stock X 4.83% 0.00500

Stock Y 3.98% 0.004000

The covariance of returns on stocks X and Y is 0.003700. Consider a portfolio of 40% stock X and 60% stock Y.

5. Summary statistics for returns on two stocks X and Y are listed below.

Mean Variance

Stock X 4.88% 0.00500

Stock Y 3.71% 0.007000

The covariance of returns on stocks X and Y is 0.002700. Consider a portfolio of 60% stock X and 40% stock Y

What is the standard deviation of portfolio returns?

Please specify your answer in decimal terms and round your answer to the nearest thousandth (e.g., enter 12.3 percent as 0.123).

Note that the correct answer will be evaluated based on the full-precision result you would obtain using Excel