Question: Question: Refer to the below table to answer the questions that follow. Assume that returns are effective annual rates. Year Return on Stock A Return

Question: Refer to the below table to answer the questions that follow. Assume that returns are effective annual rates.

Year

Return on Stock A

Return on Market

2007

35%

15%

2008

-35%

-25%

2009

15%

40%

1. What is the covariance of stock As returns with the market portfolio?

2. What is the correlation of returns between stock A and the market?

3.What is the beta of stock A?

4.What is the diversifiable variance of stock A?

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