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Use the following yearly rate of return valoes for Questions 1, 2, 3, and4. Market...

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Accounting

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Use the following yearly rate of return valoes for Questions 1, 2, 3, and4. Market Risk-frre Year Stock A Stock B Stock C retura return 2008 9.0% 8.0% 11.0% 10.0% 1.0% 2009 10.0% 11.0% 3.0% 9.0% 10% 2010 -3.0% 6.0% -6.0% 8.0% 10% 2011 -3.0% -110% -11.0% -15.0% 1.0n% 2012 9.0 % 3.0% 6.% 6.0% 10% 2013 -8.0% -4.0% -2.0% 20% 10% 2014 11.0% 15.% 13.0% 6.0% 10% -2.0% 10% 2015 -9.0% -5.0% -5.0% 2016 3.0% 1.0% 10.0% 14.0% 14.0% 10.0% -30% 10% 2017 -6.0% -1.0% 5,0% 7% 20% 1.0% 2018 2.0% 1. Lamar wants to invest S1000 in a portfolio that invests in stocks A and B. Lamar does not want to short sell the historical returns shown above for (so portfolio weights cannot be negative). Lamar decides to computing expected portfolio return and variance of portfolio retum. (10 pts) (a) Find the expected return, standard deviation of return, and covariance of return for stocks A and B. (b) What is the highest expected portfolio return that Lamar can achieve? (c) Find the expected portfolio return and standard deviation of portfolio return for 4 possible portfolios. and plot the 4 portfolios on the mean-standard deviation plane S811 21

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