The following table summarizes the annual returns you would have
The following table summarizes the annual returns you would have made on two companies—Scientific Atlanta, a satellite and data equipment manufacturer, and AT&T, the telecomm giant, from 1988 to 1998.
a. Estimate the average and standard deviation in annual returns in each company.
b. Estimate the covariance and correlation in returns between the two companies
c. Estimate the variance of a portfolio composed, in equal parts, of the two investments.
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