1. Calculate volatility and lower partial moment using the data below.

Target return is 0%

rate of return : 7,3%, 6.9%, -1.4%, 11,5%, 13.6%, -0.2%, -1.4%, 11.8%, 12.5%, 8.3%.

2. The correlation between volatility of asset i and the market is -0.5, market volatility is 10%, volatility of asset i is 6%. What is beta?

Apply the beta to calculate the expected rate of return. Risk-free rate of return is 2%, market expected rate of return is 5%