Determine the average return on security

Reference no: EM1353291

Suppose the security I and security J have the following historical returns:
Year kI kJ
2001 20% 40%
2002 29 36
2003 -12 -25

1. What is the (arithmetic) average return on security I?
2. What is the standard deviation of the return on security I? (Use n-1 for the denominator.)
3. Suppose you invest 50% of your money in I and the rest in J to form a portfolio P. What is the average return on portfolio P?
4. What is the standard deviation of the return on portfolio P? (Use n-1 for the denominator.)

Reference no: EM1353291

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