Given the following returns: Year      Stock X      Market i…

Given the following returns: Year      Stock X      Market index    1          -0.36            -0.29    2          -0.25             0.41    3          -0.14             0.09    a.  Calculate the beta of stock X.  b.  Calculate the alpha of stock X.  c.  Calculate the error terms of stock X.  d.  Calculate the systematic risk of stock X.  e.  Calculate the unsystematic risk of stock X.  f.  Is stock X a good stock to consider for inclusion in a portfolio?  Explain.  g.  Write out the var-cov matrix of stock X and market index. 

The following var-cov matrix of market index M, stock S, and…

The following var-cov matrix of market index M, stock S, and stock B:            |      M           S              B          M |     0.1        0.04        0.05          S  |                  0.2           0.06        B  |                                  0.3      Investor K invests $5,000 in Portfolio K with $500 in S and $4,500 in B.  Calculate the total risk of Portfolio K, the systematic risk of Portfolio K, and the unsystematic risk of Portfolio K.