Question

The following table contains returns for 2 stocks (A and B). What is the numerical correlation...

  1. The following table contains returns for 2 stocks (A and B). What is the numerical correlation of the 2 stocks? Round to two decimals places.

    Year Stock A Stock B

    2015 5.33% 7.44%

    2016 -1.76% 2.30%

    2017 -6.99% -7.00%

    2018 5.18% 1.33%

    2019 1.00% -2.22%

    2020 3.45% 11.00%

  2. Use the following table to calculate the expected return of Stock D if the expected portfolio return is 7.10%. Enter as decimal (not %) and round to 3 decimal places. Enter as negative (-) if necessary.

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Answer #1

I used excel data analysis pack to calculate correlation

1. Correlation Coefficient = 0.74

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