QUESTION $8$

Table $3$ presents historical returns from three different assets $-$ X$,$ Y$,$ and Z $-$ from $2017$ to $2021,$

along with their average returns and standard deviations.

Required:

a$.$ Compute and interpret the following:

i$.$Average returns on assets $x,Y,$ and $Z.$

ii$.$Standard deviation or the risks of assets $x,Y$ and $Z.$

iii.Portfolio returns for $R_s,$ and $R_s$ iv$.$Portfolio

standard deviation for $R_r,$ and $R_c.$

b$.$ Describe the relationship among the assets. What happens when these assets are

combined in different ways to form portfolios?QUESTION $8$

Table $3$ presents historical returns from three different assets $-$ X$,$ Y$,$ and Z $-$ from $2017$ to $2021,$ along with their average returns and standard deviations.

Date Return on Asset X $($RX$)$ Return on Asset Y $($RY$)$ Return on Asset Z $($RZ$)$

$20178168$

$2018101410$

$2019121212$

$2020141014$

$202116816$

Required:

a$.$ Compute and interpret the following:

i$.$Average returns on assets X$,$ Y$,$ and Z$.$

ii$.$Standard deviation or the risks of assets X$,$ Y and Z$.$

iii.Portfolio returns for RXY$,$ and RXZ iv$.$Portfolio standard deviation for RXY$,$ and RXZ$.$

b$.$ Describe the relationship among the assets. What happens when these assets are combined in different ways to form portfolios?