Question: Here is the problem I am trying to answer (specifically 1C); 1.Use the index data to present the following: A.Suppose that you invest $1 two

Here is the problem I am trying to answer (specifically 1C);

1.Use the index data to present the following:

A.Suppose that you invest $1 two years ago in each asset class, graph (all five on one graph) the month-end value of your investment for the past 23 months.

B.Produce a table with the distribution of monthly returns (not the month-end values in A) using basic statistics: Mean median, maximum, minimum, and standard deviation. Comment.

C.Present the correlation matrix and the covariance matrix of the monthly returns with each other. Comment on these relations.

How does one solve for correlations and covariances? What is the difference between the expected return and the average (mean) return in order to solve for them both?

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