How to solve

L$3\mathrm{.}3$ Exercises

Exercise $3.$ Let $(x,Y)$:$s_{?}$ be the return rates $(\%)$ on two stocks A and $B$ over the past $10$ years. A few of the summary

statistics are:

The return rate on a portfolio made up of $p100\%$ of stock A and $(1-p)100\%$ of stock $B$ is

$R=px+(1-p)Y.$

$($a$)$ For $p=0\mathrm{.}4$ and $,$ compute mean and "volatility" $.$

$($b$)$ For $p=0\mathrm{.}4$ and $,$ compute mean$($R: and "volatility" $.$

$($c$)$ For $p=0\mathrm{.}4$ and $,$ compute mean and "volatility" $.$

$($d$)$ For $p=0\mathrm{.}9$ and $,$ compute mean and "volatility" $.$

$($e$)$ For $p=0\mathrm{.}9$ and $,$ compute mean and "volatility" $.$

$($f$)$ For $p=0\mathrm{.}9$ and $,$ compute mean and "volatility" $sd(R$:$s).$

$($g$)$ Which of these portfolio scenarios $($a$)-($f$),$ would you be most attracted to and why?