Question: 7. Using the data in the following table, estimate (a) the average return and volatility for each stock, (b) the covariance between the stocks, and

7. Using the data in the following table, estimate (a) the

7. Using the data in the following table, estimate (a) the average return and volatility for each stock, (b) the covariance between the stocks, and (c) the correlation between these two stocks. Year 2004 2005 2006 2007 2008 2009 Stock A -10% 20% 5% -5% Stock B 21% 7% 30% -3% -8% 25% 2% 9%

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