Question

Suppose the annual returns for North Airline are 12%, 20%, 5%, -5%, -2%, 7% and for South Airline are 8%, -5%, -2%, 7%, 5%, 24%. The volatility of returns for South Airline is? The Standard Deviation of returns for North Airline is?The Covariance of returns between North & South Airlines is?The Correlation Coefficient of returns between North & South Airlines is?The mean return for North Airline is?

Answer 1

	n=	6.0000
	X̅=ΣX/n	6.1667
	Y̅=ΣY/n	6.1667
	sx=(√(Σx2-(Σx)2/n)/(n-1))=	9.1524
	sy=(√(Σy2-(Σy)2/n)/(n-1))=	10.1472
	Cov=sxy=(ΣXY-(ΣXΣY)/n)/(n-1)=	-23.8333
	r=Cov/(Sx*Sy)=	-0.2566

from above:

Standard Deviation of returns for South Airline is =9.1524

Standard Deviation of returns for North Airline is =10.1472

Covariance of returns between North & South Airlines is = -23.8333

Correlation Coefficient of returns between North & South Airlines is =-0.2566

The mean return for North Airline is =6.1667