Based on the following information determine the covariance and correlation between the returns of the two stocks.
| State of Economy | Probability of State of Economy | Return of X | Return of Y |
| Bear | 0.35 | -0.02 | 0.034 |
| Normal | 0.60 | 0.138 | 0.062 |
| Bull | 0.05 | 0.218 | 0.092 |
| Cov = 0.001243,Corr=0.9794 |
| Cov = 0.001243,Corr=0.00025 |
| Cov= 0.001469,Corr=0.9610 |
Your stock portfolio contains 4 stocks with the following betas and weight as a percentage of your portfolio. What is the portfolio beta?
| | Weight | Beta |
| Stock A | 10 pct. | 0.75 |
| Stock B | 35 pct. | 1.90 |
| Stock C | 20 pct. | 1.38 |
| Stock D | 35 pct. | 1.16 |
You are constructing a two stock portfolio based on the information provided below. What dollar amount will you invest in each stock to achieve the desired return goal?
| | Stock X | Stock Y |
| Expected Return | 14.0% | 9.0% |
Goal Return of Portfolio: 10.00%
Dollar Amount to Invest: $20,000
A firm you are analyzing has had the following returns the past 5 years: 27.0%, 33.0%, -40.0%, -14.0% and 22.0 %. What are the standard deviation and variance of the past five year returns?
A stock has had returns of 16.12%, 12.11%, 5.83%, 26.14%, and -13.19% over the past five years. What was the holding period return for the stock?