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The following are monthly percentage price changes for four market indexes.  Month          DJIA        …

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The following are monthly percentage price changes for four market indexes. 

Month          DJIA             S&P 500          Russell 2000             Nikkei

1                    0.03                0.02                 0.04                            0.04

2                    0.07                0.06                0.10                            -0.02

3                   -0.02               -0.01                -0.04                          0.07

4                    0.01                 0.03                0.03                            0.02

5                    0.05                 0.04                 0.11                           0.02

6                   -0.06                -0.04               -0.08                           0.06

Compute the following.

a. Average monthly rate of return for each index.

b. Standard deviation for each index

c. Covariance between the rates of return for the following indexes. 

    DJIA -S&P 500

    S&P 500– Russell 2000

    S&P 500- Nikkei

    Russell 2000- Nikkei

d. the correalation coefficients for the same four combinations

e. Using the answer from parts (a), (b), and (d), calculate the expected return and standard deviation of a portfolio consisiting equal parys of (1) the S&P and the Russell 2000 and (2) the S&P and the Nikkei. Discuss the two portfolios.

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