Just answer part E.

The following are monthly percentage price changes for four market indexes.

Month	DJIA		S&P 500		Russell 2000		Nikkei
1	0.04		0.03		0.05		0.05
2	0.08		0.07		0.11		-0.02
3	-0.01		-0.02		-0.04		0.05
4	0.02		0.04		0.04		0.01
5	0.04		0.03		0.13		0.01
6	-0.07		-0.05		-0.10		0.08

Compute the following.

Average monthly rate of return for each index. Round your answers to five decimal places. DJIA: .01667

S&P 500: .01667

Russell 2000: .03167

Nikkei: .03000

Standard deviation for each index. Do not round intermediate calculations. Round your answers to four decimal places. DJIA: .0516

S&P 500: .0437

Russell 2000: .0880

Nikkei: .0363

Covariance between the rates of return for the following indexes. Use a minus sign to enter negative values, if any. Do not round intermediate calculations. Round your answers to six decimal places. Covariance (DJIA, S&P 500): .001806

Covariance (S&P 500, Russell 2000): .002889

Covariance (S&P 500, Nikkei): -0.001200

Covariance (Russell 2000, Nikkei): -0.00288

The correlation coefficients for the same four combinations. Use a minus sign to enter negative values, if any. Do not round intermediate calculations. Round your answers to four decimal places. Correlation (DJIA, S&P 500): .9609

Correlation (S&P 500, Russell 2000): .9026

Correlation (S&P 500, Nikkei): -.9077

Correlation (Russell 2000, Nikkei): -.8574

1. Using the unrounded answers from parts (a), (b), and (d), calculate the expected return and standard deviation of a portfolio consisting of equal parts of (1) the S&P and the Russell 2000 and (2) the S&P and the Nikkei. Do not round intermediate calculations. Round your answers to five decimal places.

   Expected return (S&P 500 and Russell 2000):

   Standard deviation (S&P 500 and Russell 2000):

   Expected return (S&P 500 and Nikkei):

   Standard deviation (S&P 500 and Nikkei):

   Since S&P 500 and Russell 2000 have a strong -Select-negativepositiveItem 21 correlation, meaningful reduction in risk -Select-is not observedis observedItem 22 if they are combined.

   Since S&P 500 and Nikkei have a strong -Select-negativepositiveItem 23 correlation, meaningful reduction in risk -Select-is not observedis observedItem 24 if they are combined.