Question: Using the data in the following table, estimate (a) the covariance between the stocks and (b) the correlation between these two stocks. Year 2009 2010

Using the data in the following table, estimate

(a)

the covariance between the stocks and

(b)

the correlation between these two stocks.

Year

2009

2010

2011

2012

2013

2014

Stock A

6%

10%

8%

10%

1%

8%

Stock B

26%

32%

33%

1%

4%

29%

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