Problem 6-03 The following are the monthly rates of return for Madison Cookies and for Sophie Electric during a six-month period. Month Madison Cookies Sophie Electric 1 -0.02 0.06 2 0.06 -0.01 3 -0.09 -0.08 4 0.13 0.16 5 -0.02 -0.06 6 0.03 0.01 Compute the following. Do not round intermediate calculations. Round your answers to four decimal places. a. Average monthly rate of return R, for each stock. Madison Cookies: Sophie Electric: b. Standard deviation of returns for each stock. Madison Cookies: Sophie Electric: c. Covariance between the rates of return. d. The correlation coefficient between the rates of return. Would these two stocks be good choices for diversification? Why or why not?

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