PLEASE ANSWER ALL THE QUESTIONS

Consider the data contained in the table below, which lists 30 menthly excess returns to two different actively mansged stock portfoos (A and B) and three different corfinon risk tactogs (1, 2, and 3). (Nete: You may find it use-Nit in wiea a merumuter enenadeksat oroaram such as Microsoft Excel to calculate your answers.) a. Compute the average monthly return and monthly standard return deviation for each portfolio and all three riak factors. Aiso state these values on an annioan ied bseis. (Hint: Monthly returns can be annualized by multiplying them by 12, while monthly standard deviations can be annualized by multiglying them by the sausee foot of 12.) Use a minus sign to enter negative values, if any. Do not round intermediate calculations. Round your answers to three decimal places. b. Rased on the return and standard deviation cakculations for the two portfolios from Part a, is it ciear whether one portfolio outperformed the other over this fime gerided? Do not make any asditional calculations to answer this qutestion. Potifolio A earned a return and a standard deviation than fortfotio 8 . Therefore, it ciear that one portfolio outperformed the other civer this time period. c. Calcuiate the correiation coefficients between each pair of the common risk factors (i.e., 1.8.2,18.3, and 2.3 ). Use a minus sign to enter negative values, if any Go not round intermediate calculations. Round your answers to four decimal places. Correlation between i i 2 it Correlation between I a 3: Cocrelation between 2 \& 3: c. In theory, what should be the value of the correlation coefficient between the common risk facters? Explain why. In theory the correlations should be because we want the factors to be