# Long Dong Chinese Man Essay

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arentheses at the start of the question, and the total points for the entire assignment adds up to 100. This assignment covers Statistics as related to finance. Refer to Note on Review of Statistics before you attempt this assignment. And feel free to use the statistical functions in Excel/Spreadsheets to calculate stuff.
In accordance with the Coursera Honor Code, I (Amanda Milligan) certify that the answers here are my own work.
Question 1
(5 points) Shareholders of Exxon Oil Company face a variety of risks in holding its shares. If the economy falters, people tend to travel less and so there is less demand from the airlines industry for Exxon's fuels. This type of risk that Exxon's shareholders bear is

Which investment best fits your grandfather's needs?
Portfolio A.
Portfolio C.
Portfolio B.
Question 4
(10 points) Since investors are typically risk averse, they require a risk premium for any additional risk, regardless of source, that holding a security requires them to bear.
True.
False.
Question 5
(10) While computing covariances among the returns of several stocks can be complicated, the covariance of a stock's return with itself is always one.
False.
True.
Question 6
(10 points) As a CEO you wish to maximize the productivity of your workers. You are thinking about providing your employees with smartphones so they can be readily available to clients and increase sales. However, you are also concerned that your employees are just as likely to download apps that will distract them from their work, leading them to play games and update their social networking sites rather than focus on the job of pleasing clients. To test this you randomly select 6 employees for an experiment. You provide 3 with the new smart phone and the other 3 use their existing technology. The following chart shows their changes in sales. Based on this small sample, what is the correlation between smartphone and increase in sales? [Hint: It may help to use the spreadsheet function CORREL to calculate the correlation. Also, enter the correlation in percentage terms with no more than two decimals, but do not enter the % sign. ] {Anthony, Smartphone: Yes; change in sales 60; Kira,