Question: The following table summarizes the annual returns you would have made on two companiesScientific Atlanta, a satellite and data equipment manufacturer, and AT&T, the telecomm

The following table summarizes the annual returns you would have made on two companies—Scientific Atlanta, a satellite and data equipment manufacturer, and AT&T, the telecomm giant, from 1988 to 1998.

The following table summarizes the annual returns you would have

a. Estimate the average and standard deviation in annual returns in each company.
b. Estimate the covariance and correlation in returns between the two companies
c. Estimate the variance of a portfolio composed, in equal parts, of the two investments.

Year Scientific Atlanta (%) 80.95 -47.37 AT&T (%) 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 58.26 33.79 29.88 30.35 2.94 -4.29 28.86 -6.36 48.64 23.55 31 132.44 32.02 25.37 28.57 0.00 11.67 36.19

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