What are the covariance of stock a and b

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Consider the following table whic gives historical returns on two stocks and the market.

Year Stock A return % Stock B return %

2007 0.15 0.12

2008 0.22 0.05

2009 0.28 -0.06

Assume that these returns can be used to estimate expectation, variacne and covariacne of future returns.

1) What are the expected rates of returns on each stock?

2) What are the covariance of stock A and B?

Reference no: EM132795883

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