Question: a) Calculate the main statistic measures to explain the relationship between stock A and the market portfolio: The sample covariance between rate of return for


a) Calculate the main statistic measures to explain the relationship between stock A and the market portfolio: The sample covariance between rate of return for the stock A and the market: The sample Beta factor of stock A; The sample correlation coefficient between the rates of return of the stock A and the market; The sample coefficient of determination associated with the stock A and the market. b) Draw in the characteristic line of the stock A and give the interpretation - what does it show for the investor? c) Calculate the sample residual variance associated with stock's A characteristic line and explain how the investor would interpret the number of this statistic. d) Do you recommend this stock for the investor with the lower tolerance of risk
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