Returns on the stock of First Boston and Midas Metals for the years 2010-2013 are shown below.
a. Compute the average annual return for each stock and a portfolio consisting of 50% First Boston and 50% Midas.
b. Compute the standard deviation for each stock and the portfolio.
c. Are the stocks positively or negatively correlated and what is the effect on risk?
Definitions:
Individual Income Tax Returns
Forms submitted by individuals to report income, calculate taxes owed, and determine eligibility for tax refunds.
Corporate Profits Tax
A levy placed on the profit of a firm, with different rates used for varying levels of profit.
Individual Income Tax Rate
The percentage at which an individual's earned income is taxed by the government, which can vary depending on the level of income and other factors.
Corporate Sector
The segment of the economy that is comprised of companies or corporations and is distinguished from the public sector and private individuals.
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