Below is annual stock return data on hollenbeck corp and

Question

Below is annual stock return data on Hollenbeck Corp and Luzzi Edit, Inc.

                  Year        Hollenbeck          Luzzi Edit

                  2010      10%                         -3%

                  2011      15%                         0%

                  2012      -10%                         15%

                  2013      5%                            10%

a. What is the average return, variance, and standard deviation for each stock?

b. What is the expected portfolio return on a portfolio comprised of

                  i. 25% Hollenbeck Corp and 75% Luzzi Edit?

                  ii. 50% Hollenbeck Corp and 50% Luzzi Edit?

                  iii. 75% Hollenbeck Corp and 25% Luzzi Edit?

c. Without doing any calculations, would you expect the correlation between the returns on Hollenbeck Corp and Luzzi Edit's stock to be positive, negative, or zero? Why?