Altempts

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Problem $6-03$

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Problem $6-03$

The following are the monthly rates of return for Madison Cookies and for Sophie Electric during a sic$-$month period.

Eompute the following. Do not round intermediate calculations, Round yeur answers te Rear decimal places.

a$.$ Average monthly rate of return. $\frac{?}{\text{b}\text{a}\text{r}}(R),$ for each stock

Madison Cookies:

Sophie Electrict

b$.$ Standard deviation of retums for each stock

Madison Cookies:

Sophie Electric:

c$.$ Covariance between the rates of retum

Covy

d$.$ The correlation coefficient between the rates of return

nit

Would these two stocks be good choices for diversification? Why or why not?

Madison Cookies and Sophie Electric are

choices for diversification as these assets have

Select$-$

correlation.