Question: Using the data in the following table, (Click on the following icon in order to copy its contents into a spreadsheet.) Year 2010 2011 2012

Using the data in the following table,

(Click on the following icon

in order to copy its contents into a spreadsheet.)

Year

2010

2011

2012

2013

2014

2015

Stock A

7%

9%

2%

1%

2%

11%

Stock B

30%

25%

40%

3%

6%

22%

, estimate the:

a. Average return and volatility for each stock.

b. Covariance between the stocks.

c. Correlation between these two stocks.

a. Estimate the average return and volatility for each stock.

The average return of stock A is ________%. (Round to two decimal places.)

The average return of stock B is _______%.(Round to two decimal places.)

The standard deviation of stock A is ________.(Round to five decimal places.)

The standard deviation of stock B is _______.(Round to five decimal places.)

b. Estimate the covariance between the stocks.

The covariance is ______. (Round to five decimal places.)

c. Estimate the correlation between these two stocks.

The correlation is ________. (Round to five decimal places.)

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