Quote = $10

Year Price Increase/-Decrease in Price Annual Return

(Increase/-Decrease in Price) / Previous Year's Price
1989 1.20
1990 2.09 0.89 74.17%
1991 4.64 2.55 122.01%
1992 5.34 0.70 15.09%
1993 5.05 - 0.29 -5.43%
1994 7.64 2.59 51.29%
1995 10.97 3.33 43.59%
1996 20.66 9.69 88.33%
1997 32.31 11.65 56.39%
1998 69.34 37.03 114.61%

Year Annual Return

1990 74.17%
1991 122.01%
1992 15.09%
1993 -5.43%
1994 51.29%
1995 43.59%
1996 88.33%
1997 56.39%
1998 114.61%
Total 560.03%
Divided by 9
Average An 62.23%
 Year Annual Return Average Annual Return Difference Difference Squared

1990 74.17% 62.23% 11.94% 1.43%

1991 122.01% 62.23% 59.78% 35.74%
1992 15.09% 62.23% -47.14% 22.22%
1993 -5.43% 62.23% -67.66% 45.77%
1994 51.29% 62.23% -10.94% 1.20%
1995 43.59% 62.23% -18.64% 3.47%
1996 88.33% 62.23% 26.11% 6.82%
1997 56.39% 62.23% -5.84% 0.34%
1998 114.61% 62.23% 52.38% 27.44%
Total of Difference Squared 144.43%
Divided by (Number of Data - 1) 8
Variance 18.05%
Standard Deviation (Square Root of Variance) 42.49%
Quote = 18 Year Annual Return

1989 80.95%
Scientific Atlanta AT&T 1990 -47.37%
1989 80.95% 58.26% 1991 31.00%
1990 -47.37% -33.79% 1992 132.44%
1991 31.00% 29.88% 1993 32.02%
1992 132.44% 30.35% 1994 25.37%
1993 32.02% 2.94% 1995 -28.57%
1994 25.37% -4.29% 1996 0.00%
1995 -28.57% 28.86% 1997 11.67%
1996 0.00% -6.36% 1998 36.19%
1997 11.67% 48.64% Total of Difference Squared
1998 36.19% 23.55% Divided by (Number of Data - 1)
Total 273.70% 178.04% Variance
Divided by Number of Data 10 10 Standard Deviation (Square Root of Varian
Average Annual Return 27.37% 17.80%
Year Annual Return

1989 58.26%
1990 -33.79%
1991 29.88%
1992 30.35%
1993 2.94%
1994 -4.29%
1995 28.86%
1996 -6.36%
1997 48.64%
1998 23.55%
Total of Difference Squared
Divided by (Number of Data - 1)
Variance
Standard Deviation (Square Root of Varian

Scientific Atlanta AT&T Combination (50/50) Year Annual Return

1989 80.95% 58.26% 69.61%
1990 -47.37% -33.79% -40.58% 1989 69.61%
1991 31.00% 29.88% 30.44% 1990 -40.58%
1992 132.44% 30.35% 81.40% 1991 30.44%
1993 32.02% 2.94% 17.48% 1992 81.40%
1994 25.37% -4.29% 10.54% 1993 17.48%
1995 -28.57% 28.86% 0.15% 1994 10.54%
1996 0.00% -6.36% -3.18% 1995 0.15%
1997 11.67% 48.64% 30.15% 1996 -3.18%
1998 36.19% 23.55% 29.87% 1997 30.15%
Total 273.70% 178.04% 225.87% 1998 29.87%
Divided by Number of Data 10 10 10 Total of Difference Squared
Average Annual Return 27.37% 17.80% 22.59% Divided by (Number of Data - 1)
Variance

Given: Standard Deviation

W1 = Weight 1 50%
W2 = Weight 2 50%
SD1 = Standard Deviation Coc 51.36%
SD2 = Standard Deviation Tex 27.89%
C = Correlation 54.07%

Variance = ((W1^2)*(SD1^2))+((W2^2*(SD2^2))+(2*(W1*W2*SD1*SD2*C)
Variance = ((60%^2)*(51.36%^2))+((50%^2)*(27.89%^2))+(2*50%*50%*51.36%*27.89%*54.07%)
Variance = 12.41%

Standard Deviation 35.23%

 Average Annual Return Difference Difference Squared Year Scientific Atlanta
Annual Return
27.37% 53.58% 28.71% 1989 80.95%
27.37% -74.74% 55.86% 1990 -47.37%
27.37% 3.63% 0.13% 1991 31.00%
27.37% 105.07% 110.40% 1992 132.44%
27.37% 4.65% 0.22% 1993 32.02%
27.37% -2.00% 0.04% 1994 25.37%
27.37% -55.94% 31.29% 1995 -28.57%
27.37% -27.37% 7.49% 1996 0.00%
27.37% -15.70% 2.46% 1997 11.67%
27.37% 8.82% 0.78% 1998 36.19%
ence Squared 237.38%
mber of Data - 1) 9
26.38% Year Scientific Atlanta
ation (Square Root of Variance) 51.36% Difference
1989 53.58%
Average Annual Return Difference Difference Squared 1990 -74.74%
1991 3.63%
17.80% 40.46% 16.37% 1992 105.07%
17.80% -51.59% 26.62% 1993 4.65%
17.80% 12.08% 1.46% 1994 -2.00%
17.80% 12.55% 1.57% 1995 -55.94%
17.80% -14.86% 2.21% 1996 -27.37%
17.80% -22.09% 4.88% 1997 -15.70%
17.80% 11.06% 1.22% 1998 8.82%
17.80% -24.16% 5.84% Total
17.80% 30.84% 9.51% Divided by (Number of Data - 1)
17.80% 5.75% 0.33% Covariance
ence Squared 70.01%
mber of Data - 1) 9 Standard Deviation - Scientific Atlanta
7.78% Multiply Standard Deviation - AT&T
ation (Square Root of Variance) 27.89% Product of each company's Standard Deviation

Covariance
Average Annual Return Difference Difference Squared Divided by Product of each company's Standard Deviat
Correlation
22.59% 47.02% 22.11%
22.59% -63.17% 39.90%
22.59% 7.85% 0.62%
22.59% 58.81% 34.58%
22.59% -5.11% 0.26%
22.59% -12.05% 1.45%
22.59% -22.44% 5.04%
22.59% -25.77% 6.64%
22.59% 7.57% 0.57%
22.59% 7.28% 0.53%
ence Squared 111.70%
mber of Data - 1) 9
12.411%

35.23%
.36%*27.89%*54.07%)
 Scientific Atlanta AT&T
Average Annual Return Difference Annual Return Average Annual Return Difference
27.37% 53.58% 58.26% 17.80% 40.46%
27.37% -74.74% -33.79% 17.80% -51.59%
27.37% 3.63% 29.88% 17.80% 12.08%
27.37% 105.07% 30.35% 17.80% 12.55%
27.37% 4.65% 2.94% 17.80% -14.86%
27.37% -2.00% -4.29% 17.80% -22.09%
27.37% -55.94% 28.86% 17.80% 11.06%
27.37% -27.37% -6.36% 17.80% -24.16%
27.37% -15.70% 48.64% 17.80% 30.84%
27.37% 8.82% 23.55% 17.80% 5.75%

AT&T Product of Bot Company's

Difference Difference
40.46% 21.68%
-51.59% 38.56%
12.08% 0.44%
12.55% 13.18%
-14.86% -0.69%
-22.09% 0.44%
11.06% -6.18%
-24.16% 6.61%
30.84% -4.84%
5.75% 0.51%
69.70%
ber of Data - 1) 9
7.7448%

on - Scientific Atlanta 51.36%

Deviation - AT&T 27.89%
ompany's Standard Deviation 14.32%

7.74%
ct of each company's Standard Deviat 14.32%
54.07%
Quote = 15

Coca - Cola Texas Utilities

Average Return 25% 12%
Multiply by Portfolio Composition 60% 40%
Weighted Average Retrun 15.00% 4.80%

Weighted Average - Coca Cola 15.00%

Weighted Average - Texas Utilties 4.80%
Average Return of Portfolio 19.80%

Given:

W1 = Weight 1 60%
W2 = Weight 2 40%
SD1 = Standard Deviation Coca - Cola 36%
SD2 = Standard Deviation Texas Utility 22%
C = Correlation 28%

Variance = ((W1^2)*(SD1^2))+((W2^2*(SD2^2))+(2*(W1*W2*SD1*SD2
Variance = ((60%^2)*(36%^2))+((40%^2)*(22%^2))+(2*60%*40%*36
Variance = 6.50%

Standard Deviation of Portfolio 25.50%

W1 = Weight 1 60%
W2 = Weight 2 40%
SD1 = Standard Deviation Coca - Cola 36%
SD2 = Standard Deviation Texas Utility 22%
C = Correlation 28%

Minimum Variance of Portfolio provided by Coca Cola= ((SD2^2)-((SD2*SD1*C)))/((SD2^2)+(SD1^2)-(2*SD2*SD1*C)

Minimum Variance of Portfolio provided by Coca Cola= ((22%^2)-((22%*36%*28%)))/((22%^2)+(36%^2)-(2*22%*
Minimum Variance of Portfolio provided by Coca Cola= 19.62%

Minimum Variance of Portfolio provided by Texas Utilities = ((SD1^2)-((SD1*SD2*C)))/((SD1^2)+(SD2^2)-(2*SD2*SD1*C)

Minimum Variance of Portfolio provided by Texas Utilities = ((36%^2)-((36%*22%*28%)))/((36%^2)+(22%^2)-(2*36%*
Minimum Variance of Portfolio provided by Texas Utilities = 80.38%
 ^2*(SD2^2))+(2*(W1*W2*SD1*SD2*C)
0%^2)*(22%^2))+(2*60%*40%*36%*22%*28%)

/((SD2^2)+(SD1^2)-(2*SD2*SD1*C))
%)))/((22%^2)+(36%^2)-(2*22%*36%*28%))

/((SD1^2)+(SD2^2)-(2*SD2*SD1*C))
%)))/((36%^2)+(22%^2)-(2*36%*22%*28%))
Quote = 8

Coca - Cola Texas Utilities

Average Return 25% 12%
Multiply by Portfolio Composition 60% 40%
Weighted Average Retrun 15.00% 4.80%

Weighted Average - Coca Cola 15.00%

Weighted Average - Texas Utilties 4.80%
Average Return of Portfolio 19.80%

Given:

W1 = Weight 1 60%
W2 = Weight 2 40%
SD1 = Standard Deviation Coca - Cola 45%
SD2 = Standard Deviation Texas Utility 22%
C = Correlation 20%

Variance = ((W1^2)*(SD1^2))+((W2^2*(SD2^2))+(2*(W1*W2*SD1*SD2
Variance = ((60%^2)*(45%%^2))+((40%^2)*(22%^2))+(2*60%*40%*
Variance = 9.01%

Standard Deviation of Portfolio 30.02%

W1 = Weight 1 60%
W2 = Weight 2 40%
SD1 = Standard Deviation Coca - Cola 45%
SD2 = Standard Deviation Texas Utility 22%
C = Correlation 20%

Minimum Variance of Portfolio provided by Coca Cola= ((SD2^2)-((SD2*SD1*C)))/((SD2^2)+(SD1^2)-(2*SD2*SD1*C)

Minimum Variance of Portfolio provided by Coca Cola= ((22%^2)-((22%*45%*20%)))/((22%^2)+(45%^2)-(2*22%*
Minimum Variance of Portfolio provided by Coca Cola= 13.54%

Minimum Variance of Portfolio provided by Texas Utilities = ((SD1^2)-((SD1*SD2*C)))/((SD1^2)+(SD2^2)-(2*SD2*SD1*C)

Minimum Variance of Portfolio provided by Texas Utilities = ((45%^2)-((45%*22%*20%)))/((45%^2)+(22%^2)-(2*45%*
Minimum Variance of Portfolio provided by Texas Utilities = 86.46%
^2*(SD2^2))+(2*(W1*W2*SD1*SD2*C)
40%^2)*(22%^2))+(2*60%*40%*45%*22%*20%)

/((SD2^2)+(SD1^2)-(2*SD2*SD1*C))
%)))/((22%^2)+(45%^2)-(2*22%*45%*20%))

/((SD1^2)+(SD2^2)-(2*SD2*SD1*C))
%)))/((45%^2)+(22%^2)-(2*45%*22%*20%))
Quote = 10

If Correlation Coefficient is -1

Given:

W1 = Weight 1 50%
W2 = Weight 2 50%
SD1 = Standard Deviation Times Mirror 25%
SD2 = Standard Deviation Unilever 40%
C = Correlation -1

Variance = ((W1^2)*(SD1^2))+((W2^2*(SD2^2))+(2*(W1*W2*SD1*SD2*C)
Variance = ((50%^2)*(45%%^2))+((50%^2)*(22%^2))+(2*50%*50%*45%*22%*20%)
Variance = 0.56250%

Standard Deviation of Portfolio 7.50%

If Correlation Coefficient is -0.8

Given:

W1 = Weight 1 50%
W2 = Weight 2 50%
SD1 = Standard Deviation Times Mirror 25%
SD2 = Standard Deviation Unilever 40%
C = Correlation -0.8

Variance = ((W1^2)*(SD1^2))+((W2^2*(SD2^2))+(2*(W1*W2*SD1*SD2*C)
Variance = ((50%^2)*(45%%^2))+((50%^2)*(22%^2))+(2*50%*50%*45%*22%*20%)
Variance = 1.56250%

Standard Deviation of Portfolio 12.50%

If Correlation Coefficient is -0.6

Given:

W1 = Weight 1 50%
W2 = Weight 2 50%
SD1 = Standard Deviation Times Mirror 25%
SD2 = Standard Deviation Unilever 40%
C = Correlation -0.6

Variance = ((W1^2)*(SD1^2))+((W2^2*(SD2^2))+(2*(W1*W2*SD1*SD2*C)
Variance = ((50%^2)*(45%%^2))+((50%^2)*(22%^2))+(2*50%*50%*45%*22%*20%)
Variance = 2.56250%

Standard Deviation of Portfolio 16.01%

If Correlation Coefficient is -0.4

Given:
W1 = Weight 1 50%
W2 = Weight 2 50%
SD1 = Standard Deviation Times Mirror 25%
SD2 = Standard Deviation Unilever 40%
C = Correlation -0.4

Variance = ((W1^2)*(SD1^2))+((W2^2*(SD2^2))+(2*(W1*W2*SD1*SD2*C)
Variance = ((50%^2)*(45%%^2))+((50%^2)*(22%^2))+(2*50%*50%*45%*22%*20%)
Variance = 3.56250%

Standard Deviation of Portfolio 18.87%

If Correlation Coefficient is -0.2

Given:

W1 = Weight 1 50%
W2 = Weight 2 50%
SD1 = Standard Deviation Times Mirror 25%
SD2 = Standard Deviation Unilever 40%
C = Correlation -0.2

Variance = ((W1^2)*(SD1^2))+((W2^2*(SD2^2))+(2*(W1*W2*SD1*SD2*C)
Variance = ((50%^2)*(45%%^2))+((50%^2)*(22%^2))+(2*50%*50%*45%*22%*20%)
Variance = 4.56250%

Standard Deviation of Portfolio 21.36%

If Correlation Coefficient is 0

Given:

W1 = Weight 1 50%
W2 = Weight 2 50%
SD1 = Standard Deviation Times Mirror 25%
SD2 = Standard Deviation Unilever 40%
C = Correlation 0

Variance = ((W1^2)*(SD1^2))+((W2^2*(SD2^2))+(2*(W1*W2*SD1*SD2*C)
Variance = ((50%^2)*(45%%^2))+((50%^2)*(22%^2))+(2*50%*50%*45%*22%*20%)
Variance = 5.56250%

Standard Deviation of Portfolio 23.58%

If Correlation Coefficient is 0.2

Given:

W1 = Weight 1 50%
W2 = Weight 2 50%
SD1 = Standard Deviation Times Mirror 25%
SD2 = Standard Deviation Unilever 40%
C = Correlation 0.2

Variance = ((W1^2)*(SD1^2))+((W2^2*(SD2^2))+(2*(W1*W2*SD1*SD2*C)
Variance = ((50%^2)*(45%%^2))+((50%^2)*(22%^2))+(2*50%*50%*45%*22%*20%)
Variance = 6.56250%

Standard Deviation of Portfolio 25.62%

If Correlation Coefficient is 0.4

Given:

W1 = Weight 1 50%
W2 = Weight 2 50%
SD1 = Standard Deviation Times Mirror 25%
SD2 = Standard Deviation Unilever 40%
C = Correlation 0.4

Variance = ((W1^2)*(SD1^2))+((W2^2*(SD2^2))+(2*(W1*W2*SD1*SD2*C)
Variance = ((50%^2)*(45%%^2))+((50%^2)*(22%^2))+(2*50%*50%*45%*22%*20%)
Variance = 7.56250%

Standard Deviation of Portfolio 27.50%

If Correlation Coefficient is 0.6

Given:

W1 = Weight 1 50%
W2 = Weight 2 50%
SD1 = Standard Deviation Times Mirror 25%
SD2 = Standard Deviation Unilever 40%
C = Correlation 0.6

Variance = ((W1^2)*(SD1^2))+((W2^2*(SD2^2))+(2*(W1*W2*SD1*SD2*C)
Variance = ((50%^2)*(45%%^2))+((50%^2)*(22%^2))+(2*50%*50%*45%*22%*20%)
Variance = 8.56250%

Standard Deviation of Portfolio 29.26%

If Correlation Coefficient is 0.8

Given:

W1 = Weight 1 50%
W2 = Weight 2 50%
SD1 = Standard Deviation Times Mirror 25%
SD2 = Standard Deviation Unilever 40%
C = Correlation 0.8

Variance = ((W1^2)*(SD1^2))+((W2^2*(SD2^2))+(2*(W1*W2*SD1*SD2*C)
Variance = ((50%^2)*(45%%^2))+((50%^2)*(22%^2))+(2*50%*50%*45%*22%*20%)
Variance = 9.56250%
Standard Deviation of Portfolio 30.92%

If Correlation Coefficient is 1

Given:

W1 = Weight 1 50%
W2 = Weight 2 50%
SD1 = Standard Deviation Times Mirror 25%
SD2 = Standard Deviation Unilever 40%
C = Correlation 1

Variance = ((W1^2)*(SD1^2))+((W2^2*(SD2^2))+(2*(W1*W2*SD1*SD2*C)
Variance = ((50%^2)*(45%%^2))+((50%^2)*(22%^2))+(2*50%*50%*45%*22%*20%)
Variance = 10.56250%

Standard Deviation of Portfolio 32.50%

%*45%*22%*20%)

%*45%*22%*20%)

%*45%*22%*20%)
%*45%*22%*20%)

%*45%*22%*20%)

%*45%*22%*20%)
%*45%*22%*20%)

%*45%*22%*20%)

%*45%*22%*20%)

%*45%*22%*20%)
%*45%*22%*20%)
Quote = 10

W1 = Weight 1 33.33%
W2 = Weight 2 33.33%
W3 = Weight 3 33.33%
SD1 = Standard Deviation Sony 23%
SD2 = Standard Deviation Tesoro 27%
SD3 = Standard Deviation Storage Tech 50%
C1 = Correlation of Sonny to Tesoro - 0.15
C2 = Correlation of Sony to Storage Tech 0.20
C3 = Correlation of Tesoro to Storage Tech - 0.25

Variance = ((W1^2)*(SD1^2))+((W2^2*(SD2^2))+((W3^2*(SD3^2))+(2*(W1*W2*SD1*
Variance = ((33.33%^2)*(23%%^2))+((33.33%^2)*(27%^2))+((33.33%^2)*(50%^2))+
Variance = 3.7297%

Standard Deviation of Portfolio 19.31%

^2*(SD3^2))+(2*(W1*W2*SD1*SD2*C1)+(2*(W1*W3*SD1*SD3*C2)+(2*(W2*W3*SD2*SD3*C3)
%^2))+((33.33%^2)*(50%^2))+(2*33.33%*33.33%*23%*27%*-0.15)+(2*33.33%*33.33%*23%*50%*.20)+(2*33.33%*33.33%*27%
%*.20)+(2*33.33%*33.33%*27%*50%*-.25)
Quote = 10

Investment in Vanguard 800,000 80%

Investment in Treasury Bill 200,000 20%
Total Wealth 1,000,000 100%

Vanguard Treasury Bill

Average Return 12% 5%
Multiply by Portfolio Composition 80% 20%
Weighted Average Retrun 9.60% 1.00%

Weighted Average - Vanguard 9.60%

Weighted Average - Treasury Bill 1.00%
Average Return of Portfolio 10.60%

W1 = Weight 1 80%
W2 = Weight 2 20%
SD1 = Standard Deviation - Vanguard 25%
SD2 = Standard Deviation - Treasury Bill 0%
C = Correlation 0%

Variance = ((W1^2)*(SD1^2))+((W2^2*(SD2^2))+(2*(W1*W2*SD1*SD2*C)
Variance = ((80%^2)*(25%%^2))+((20%^2)*(0%^2))+(2*80%*20%*25%*0%*0%)
Variance = 4.00%

Standard Deviation of Portfolio 20.00%

Standard Deviation - Vanguard 25%

Multiply by Proportion Share of Vanguard in the P 80%
Standard Deviation of Portfolio 20%
W1*W2*SD1*SD2*C)
+(2*80%*20%*25%*0%*0%)
Quote = 10

a. IF you don't want to have a standard deviation in your returns, invest it all to riskless assets

Standard Deviation of Portfolio 15%

Divided by Standard Deviation of Market Portfolio 30%
Proportion of Investment in Market portfolio 50%

Total Proportion 100%

Less: Proportion of Investment in Market portfolio 50%
Proportion of Investment in Riskless Assets 50%

Standard Deviation of Portfolio 30%

Divided by Standard Deviation of Market Portfolio 30%
Proportion of Investment in Market portfolio 100%

Total Proportion 100%

Less: Proportion of Investment in Market portfolio 100%
Proportion of Investment in Riskless Assets 0%

Standard Deviation of Portfolio 45%

Divided by Standard Deviation of Market Portfolio 30%
Proportion of Investment in Market portfolio 150%

Market Riskless
Average Return 15% 5%

Required Average Return 12.00%

12% = (15%*x) + (5%*(1-x))

12% = 15%x + 5% - 5%x

15%x-5%x = 12% - 5%
10%x = 7%
x= 70%
Quote = 10 Year Annual Return

1989 80.95%
Scientific Atlanta Market Portfolio 1990 -47.37%
1989 80.95% 31.49% 1991 31.00%
1990 -47.37% -3.17% 1992 132.44%
1991 31.00% 30.57% 1993 32.02%
1992 132.44% 7.58% 1994 25.37%
1993 32.02% 10.36% 1995 -28.57%
1994 25.37% 2.55% 1996 0.00%
1995 -28.57% 37.57% 1997 11.67%
1996 0.00% 22.68% 1998 36.19%
1997 11.67% 33.10% Total of Difference Squared
1998 36.19% 28.32% Divided by (Number of Data - 1)
Total 273.70% 201.05% Variance
Divided by Number of Data 10 10
Average Annual Return 27.37% 20.11%
Year Annual Return

1989 31.49%
1990 -3.17%
1991 30.57%
1992 7.58%
1993 10.36%
1994 2.55%
1995 37.57%
1996 22.68%
1997 33.10%
1998 28.32%
Total of Difference Squared
Divided by (Number of Data - 1)
Variance
 Average Annual Return Difference Difference Squared Year Scientific Atlanta
Annual Return
27.37% 53.58% 28.71% 1989 80.95%
27.37% -74.74% 55.86% 1990 -47.37%
27.37% 3.63% 0.13% 1991 31.00%
27.37% 105.07% 110.40% 1992 132.44%
27.37% 4.65% 0.22% 1993 32.02%
27.37% -2.00% 0.04% 1994 25.37%
27.37% -55.94% 31.29% 1995 -28.57%
27.37% -27.37% 7.49% 1996 0.00%
27.37% -15.70% 2.46% 1997 11.67%
27.37% 8.82% 0.78% 1998 36.19%
ifference Squared 237.38%
y (Number of Data - 1) 9 Year Scientific Atlanta
26.38% Difference
1989 53.58%
1990 -74.74%
Average Annual Return Difference Difference Squared 1991 3.63%
1992 105.07%
20.11% 11.39% 1.30% 1993 4.65%
20.11% -23.28% 5.42% 1994 -2.00%
20.11% 10.47% 1.10% 1995 -55.94%
20.11% -12.53% 1.57% 1996 -27.37%
20.11% -9.75% 0.95% 1997 -15.70%
20.11% -17.56% 3.08% 1998 8.82%
20.11% 17.46% 3.05% Total
20.11% 2.57% 0.07% Divided by (Number of Data - 1)
20.11% 13.00% 1.69% Covariance
20.11% 8.22% 0.67%
ifference Squared 18.89% Covariance
y (Number of Data - 1) 9 Divided by Variance of Market Portfolio
2.10% Beta
 Scientific Atlanta Market Portfolio
Average Annual Return Difference Annual Return Average Annual Return
27.37% 53.58% 31.49% 20.11%
27.37% -74.74% -3.17% 20.11%
27.37% 3.63% 30.57% 20.11%
27.37% 105.07% 7.58% 20.11%
27.37% 4.65% 10.36% 20.11%
27.37% -2.00% 2.55% 20.11%
27.37% -55.94% 37.57% 20.11%
27.37% -27.37% 22.68% 20.11%
27.37% -15.70% 33.10% 20.11%
27.37% 8.82% 28.32% 20.11%

AT&T Product of Both Portfolio's Difference

Difference Difference
11.39% 6.10%
-23.28% 17.40%
10.47% 0.38%
-12.53% -13.16%
-9.75% -0.45%
-17.56% 0.35%
17.46% -9.77%
2.57% -0.70%
13.00% -2.04%
8.22% 0.72%
-1.18%
er of Data - 1) 9
-0.1307%

-0.1307%
ce of Market Portfolio 2.10%
- 0.0623
tfolio
Difference
11.39%
-23.28%
10.47%
-12.53%
-9.75%
-17.56%
17.46%
2.57%
13.00%
8.22%
Quote = 7

Standard Deviation - Market Portfolio 22%

Multiply Standard Deviation - United Airlines 66%
Product of each portfolio's Standard Deviation 14.52%

Standard Deviation - Market Portfolio 22%

Multiplly by Standard Deviation - Market Portfolio 22%
Variance of Market Porfolio 4.84%

Beta 1.5
Multiply by Variance of Market Portfolio 4.84%
Covariance 7.26%

Covariance 7.26%
Divided by Product of each portfolio's Standard Deviation 14.52%
Correlation 50.00%

Correlation 50.00%
Multiply b yCorrelation 50.00%
United Airlines' proportional risk to Market Risk 25.00%