7. Consider the following returns (15points): Stock X Realized Stock Y Realized Return Return 20.1% -14.6% 4.3% -58.1% 71.1% 17.3% 0.9% Stock Z Realized Return Year End 2004 2005 2006 2007 2008 2009 (1) (5 points) What are standard deviations of stock X and stock Y respectively? (2) (5 points) What are is the correlation between stock X's return and stock Y's return? 72.7% -25.7% 56.9% 6.7% 17.9% 0.2% -3.2% -27.0% 27.9% -5.1% -11.3% (3) (5 points) Please estimate the return and standard deviation of the combination of stock X and stock Z in the equal shares

7. Consider the following returns (15points): Stock X Realized Stock Y Realized Return Return 20.1% -14.6% 4.3% -58.1% 71.1% 17.3% 0.9% Stock Z Realized Return Year End 2004 2005 2006 2007 2008 2009 (1) (5 points) What are standard deviations of stock X and stock Y respectively? (2) (5 points) What are is the correlation between stock X's return and stock Y's return? 72.7% -25.7% 56.9% 6.7% 17.9% 0.2% -3.2% -27.0% 27.9% -5.1% -11.3% (3) (5 points) Please estimate the return and standard deviation of the combination of stock X and stock Z in the equal shares

Fundamentals of Financial Management (MindTap Course List)

14th Edition

ISBN:9781285867977

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter8: Risk And Rates Of Return

Section: Chapter Questions

Problem 22SP

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