FIN426 Assignment 1 Total Points: 50 This assignment contains problems from Chapter 7, and 8. Please answer all problems and questions completely. Problem 1 and 2 are about Chapter 7, and Problem 3 is about Chapter 8. You should provide detailed solutions which show clearly how your final answer is obtained. Just providing a number as answer to a problem will not earn you any point even though that number is correct. If you write your solutions step by step with details (such as from the equations used until obtaining the final number), even if your final answer is not correct, you would get some points if some of your prior steps are correct Probleml (20 points). The following are the monthly rates of return for Madison Cookies and for Spphine Electric during a six-month period: Month Madison Cookies Sophie Electric (MS inshort) (SE in Short) 0.04 0.06 0.07 0.12 0.02 0.05 0.07 0.02 0.10 0.15 0.06 0.02 4 Please keep 4 numbers after the decimal point in your answers. l.a. (4 points) Compute monthly average return for each stock. l.b. (8 points) Compute standard deviations of returns for each stock 1.c. (6 points) Compute covariance between the returns of the two stock 1.d. (2 points) Compute correlation coefficient of the two stocks' returns