1. Assume asset returns are explained by the single index model. The index has expected return of 10% and standard deviation of 12%. The following three stocks have the indicated estimated parameters.

	I	J	K
	-0.8	1.2	1.6
	2.0	1.7	1.4
ei	8	6	3

1. for each stock, calculate expected return and standard deviation.
2. calculate the expected return and standard deviation of a portfolio that invests 30% in I, 50% in J and 20% in K.
3. calculate the covariance between returns of J and K.