1. Define the terms return and risk. What is the relationship between an investments return and risk?

(16 marks)

2. Given the data below, find the average return and standard deviation of return for security A:

Year	Return on security A
2017	10%
2018	12%
2019	14%

(12 marks)

3. Assume that security B has an average return of 16% and a standard deviation of return of 3.3%, and that correlation between security A in (b) and security B is -1. Calculate the average return and standard deviation of return for a portfolio 50% invested in security A and 50% invested in security B. Comment on the result.

(22 marks)