Use the following historial data for the stock fund and bond fund from 2010 to 2

Question

Use the following historial data for the stock fund and bond fund from 2010 to 2016 to answer the following questions.

a) what is the Expected Return for the stock fund?

b) what is the variance of the stock fund?

c) what is the standard deviation of returns for the stock fund?

d) what is the covariance between the stock and bond fund returns?

e) what is the correlation coefficient between stock and bond fund returns?

Year Stock Fund Bond fund 2010 2011 2012 2013 2014 2015 2016 25.12 15.42 5.82 5.42 -8.25 10.82 15.25 4.15 4.52 5.1 6.25 6.75 5.25 4.25

Explanation / Answer

use functions average, stdev, var, cov and correl functions in Excel

25.12% 4.15% 15.42% 4.52% 5.82% 5.10% -5.42% 6.25% -8.25% 6.75% 10.82% 5.25% 15.25% 4.25% average 8.39% 5.18% std dev 11.06% 0.92% variance 0.012236 0.00009 cov -0.000982533 correl -0.960823732

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