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Intro The following table shows historical beginning-of-year adjusted close prices for two stocks A B 1 Year Stock A Stock B 2 2013 35.57 573.16 3 2014 32.25 513.58 4 2015 37.63 530.29 5 2016 46.62 550.17 6 2017 45.32 545.22 7 2018 40.55 561.14 8 2019 45.17 592.46 9 2020 53.2 690.48 10 2021 62.08 773.86 Part 1 Attempt 2/10 for 10 pts. Calculate the annual returns. What is the correlation coefficient? 0.75 Correct B D 12 Year 13 2013 14 2014 15 2015 16 2016 17 2017 18 2018 19 2019 20 2020 21 22 Avg. return 23 Variance 24 Covar. 25 Correlation Stock A -0.0933 0.1668 0.2389 -0.02789 -0.1053 0.1139 0.1778 0.1669 Stock B -0.104] =C3/C2-1 0.03254 0.03749 -0.009 0.0292 0.0558 0.1654 0.1208 =C10/C9-1 0.0797 0.04104 =AVERAGE(C13:220) 0.01815 0.00654 =VAR.S(C13:C20) 0.00729 =COVARIANCE.S(B13-B20, C13:C20) 0.669 =CORREL(B13:B20, C13:C20) Part 2 Attempt 6/10 for 8 pts. Assume that the historical average returns, standard deviations and covariance will hold into the future. What is the Sharpe ratio of the optimal risky portfolio? 3+ decimals Submit Intro The following table shows historical beginning-of-year adjusted close prices for two stocks A B 1 Year Stock A Stock B 2 2013 35.57 573.16 3 2014 32.25 513.58 4 2015 37.63 530.29 5 2016 46.62 550.17 6 2017 45.32 545.22 7 2018 40.55 561.14 8 2019 45.17 592.46 9 2020 53.2 690.48 10 2021 62.08 773.86 Part 1 Attempt 2/10 for 10 pts. Calculate the annual returns. What is the correlation coefficient? 0.75 Correct B D 12 Year 13 2013 14 2014 15 2015 16 2016 17 2017 18 2018 19 2019 20 2020 21 22 Avg. return 23 Variance 24 Covar. 25 Correlation Stock A -0.0933 0.1668 0.2389 -0.02789 -0.1053 0.1139 0.1778 0.1669 Stock B -0.104] =C3/C2-1 0.03254 0.03749 -0.009 0.0292 0.0558 0.1654 0.1208 =C10/C9-1 0.0797 0.04104 =AVERAGE(C13:220) 0.01815 0.00654 =VAR.S(C13:C20) 0.00729 =COVARIANCE.S(B13-B20, C13:C20) 0.669 =CORREL(B13:B20, C13:C20) Part 2 Attempt 6/10 for 8 pts. Assume that the historical average returns, standard deviations and covariance will hold into the future. What is the Sharpe ratio of the optimal risky portfolio? 3+ decimals Submit

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