Use the information provided in the table below to answer the following questions:

	Security A	Security B
E(R)	12%	13%
Standard Deviation	0.021	0.029
Beta	1.1	1.2
Variance of the market	0.0002
Correlation Coefficient (A, B)	0.6

1. what is the covariance between security A and the market?

2. if the risk free rate is 8%, what is the expected return and variance of a portfolio containing 50% of the risk-free rate and 50% of the security B?

Answer rating: 100% (QA)

1 The covariance between security A and the market can be calculated using the following formula Cov... View the full answer