Question: 3. (40 points total) Given the five observation sample of returns of the Top Black Asphalt Company and the market S&P 500 index in the

3. (40 points total) Given the five observation sample of returns of the Top Black Asphalt Company and the market S&P 500 index in the table below, calculate the various steps in detail (by setting up a detailed excel table similar to the template on p. 5, which you should cut and paste picture at the bottom of your answer sheet) the mean and variance for both the market returns and Top Black's returns, Top Black's covariance with the market returns, and the beta of Top Black with the market. What does the beta of Top Black tell you in terms of its relative risk and return compared to the market? Year Market retums Top Black Market returns (%) Top Black (%) 1 2 3 4 5 0.08 0.02 -0.07 0.03 0.02 0.15 0.06 -0.1 0 0.04 8.00% 2.00% -7.00% 3.00% 2.00% 15.00% 6.00% - 10.00% 0.00% 4.00%

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