the information below Y  relating to the monthly rates of return for two companies X and Y over a period of 4 months:  1                                                                                               xRate of return            yRate of Return   Date  Month 1  -4.76  -4.75  Month 2  5.34  7.65  Month 3  12.09  6.98  Month 4  -2.98  9.65       Calculate the covariance per month between the two companies. Show all your working.   a) If a firm increases its financial risk by selling a large bond issue that increases its financial leverage explain this assumption? Also what is the relationship between risk and return. Explain with examples.

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