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please explain, variance of a's second subtraction is 0.08 , why is not 0.035 and...

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Finance

please explain, variance of a's second subtraction is 0.08 , why is not 0.035 and variance of b's 2nd subtraction, why do we minus from 0.3 not 0.7
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11-5. Using the data in the following table, estimate (a) the average return and volatility for each stock, (b) the covariance between the stocks, and (c) the correlation between these two stocks. 2006 2008 Year Stock A Stock B 2004 -10% 21% 2005 20% 7% 2007 -5% -3% 5% 30% 2% 2009 9% 25% -8% a. RA= -10+20 + 5 - 5+2 + 9 = 3.5% 6 21+30 + 7 - 3 - 8 + 25 RB 6 = 12% + (-0.1 -0.035) + 18(0.2 - 0.08) + (0.05 - 0.035) + 1 Variance of A = 56(-0.05 -0.035) + (0.02 -0.035) + (0.09 -0.035) 1 I = 0.01123 Volatility of A = SD(R) = Variance of A = 5.01123 = 10.60% + (0.21 - 0.12)' + (0.3 -0.12)* + Variance of B = -(0.07 -0.12) + (-0.03 -0.12)* + -(-0.08 - 0.12) + (0.25 - 0.12) 1 5 @

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