Apple expected returns=(11%+22%)/2=16.50%
Google expected returns=(12%+13%)/2=12.50%
1.
=30%*16.50%+70%*12.50%=13.70%
2.
=sqrt((11%-16.50%)^2+(22%-16.50%)^2)/sqrt(2-1)=7.78%
3.
=sqrt((12%-12.50%)^2+(13%-12.50%)^2)/sqrt(2-1)=0.71%
4.
=(11%-16.50%)*(12%-12.50%)+(22%-16.50%)*(13%-12.50%)=0.00055
5.
=0.00055/(7.78%*0.71%)=0.995691372
Problem 14 Intro Apple stock had a return of 11%two years ago, and 22% last year. Google stock had a return of 12%...
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