Calculate the average return, standard deviation of Blandy, Gourmange, Portfolio, and Market as well as the correlation of the Blandy & Market and Gourmange & Market, respectively using the data below:

2. Calculate the beta from the standard deviation of the Blandy and Market, the correlation of Blandy  and Market,  and then calculate the required return for the Blandy.

3. Calculate the beta from the standard deviation of the Gourmange and Market, the correlation of the Gourmange and Market, and then calculate the required return for the Gourmange.

4. Calculate the beta of the portfolio, and then the required rate of return of the portfolio and the standard deviation of the portfolio.

Data1: rRF=4%, rM=9%,Weight of the Blandy=.75 &Weight of the Gourmange= 0.25%, and beta of the portfolio= 0.7785

Data2:

 

 

Transcribed Image Text:

year 1 2 3 st 4 01 5 6 7 8 9 10 blandy 0.26 0.15 -0.14 -0.15 0.02 -0.18 0.42 0.3 -0.32 0.28 gourmange 0.47 -0.54 0.15 0.07 -0.28 0.4 0.17 -0.23 -0.04 0.75 portfolio 0.3125 0.0225 0.0675 -0.095 -0.055 -0.035 0.3575 0.1675 -0.25 0.3975 market 0.3 0.07 0.18 -0.22 -0.14 0.1 0.26 -0.1 -0.03 0.38 year 1 2 3 st 4 01 5 6 7 8 9 10 blandy 0.26 0.15 -0.14 -0.15 0.02 -0.18 0.42 0.3 -0.32 0.28 gourmange 0.47 -0.54 0.15 0.07 -0.28 0.4 0.17 -0.23 -0.04 0.75 portfolio 0.3125 0.0225 0.0675 -0.095 -0.055 -0.035 0.3575 0.1675 -0.25 0.3975 market 0.3 0.07 0.18 -0.22 -0.14 0.1 0.26 -0.1 -0.03 0.38

Answer rating: 100% (QA)

To calculate the average return standard deviation and correlation we first need to calculate the returns for each asset using the provided data Then ... View the full answer