Present your answers using three significant digits (e.g., 0.0314) Return refers to rate of return in this assignment Use the following yearly rate of return values for Questions 1, 2, 3, and 4 Market Risk-free Year Stock A Stock B Stock C return return 2008 9.0% 8.0% 11.0% 10.0% 1.0% 2009 10.0% 11.0% 9.0% 3.0% 1.0% 2010 -3.0% -6.0% -6.0% 8.0% 1.0% -3.0% 2011 -11.0% -11.0% -15.0% 1.0% 2012 3.0% 6.0% 9.0% 6.0% 1.0% 4.0% -2.0% 1.0% 2013 -8.0% 2.0% 13.0% 2014 11.0% 15.0% 6.0% 1.0% 9.0% 1.0% 2015 -5.0% -5.0% -2.0% 14.0% 2016 10.0% 14.0% 3.0% 1.0% -6.0% 2017 -1.0% -10.0% -3.0% 1.0% 7% 2018 5.0% 2.0% 2.0% 1.0% 1. Lamar wants to invest $1000 in a portfolio that invests in stocks A and B. Lamar does not want to short sell (so portfolio weights cannot be negative). Lamar decides to use the historical returns shown above for computing expected portfolio return and variance of portfolio return (10 pts) (a) Find the expected return, standard deviation of return, and covariance of return for stocks A and B (b) What is the highest expected portfolio return that Lamar can achieve? (c) Find the expected portfolio retum and standard deviation of portfolio return for 4 possible portfolios and plot the 4 portfolios on the mean-standard deviation plane Present your answers using three significant digits (e.g., 0.0314) Return refers to rate of return in this assignment Use the following yearly rate of return values for Questions 1, 2, 3, and 4 Market Risk-free Year Stock A Stock B Stock C return return 2008 9.0% 8.0% 11.0% 10.0% 1.0% 2009 10.0% 11.0% 9.0% 3.0% 1.0% 2010 -3.0% -6.0% -6.0% 8.0% 1.0% -3.0% 2011 -11.0% -11.0% -15.0% 1.0% 2012 3.0% 6.0% 9.0% 6.0% 1.0% 4.0% -2.0% 1.0% 2013 -8.0% 2.0% 13.0% 2014 11.0% 15.0% 6.0% 1.0% 9.0% 1.0% 2015 -5.0% -5.0% -2.0% 14.0% 2016 10.0% 14.0% 3.0% 1.0% -6.0% 2017 -1.0% -10.0% -3.0% 1.0% 7% 2018 5.0% 2.0% 2.0% 1.0% 1. Lamar wants to invest $1000 in a portfolio that invests in stocks A and B. Lamar does not want to short sell (so portfolio weights cannot be negative). Lamar decides to use the historical returns shown above for computing expected portfolio return and variance of portfolio return (10 pts) (a) Find the expected return, standard deviation of return, and covariance of return for stocks A and B (b) What is the highest expected portfolio return that Lamar can achieve? (c) Find the expected portfolio retum and standard deviation of portfolio return for 4 possible portfolios and plot the 4 portfolios on the mean-standard deviation plane