Question

Consider the following 6 months of returns for 2 stocks and a portfolio of those 2 stocks Note: The portfolio is composed of 50% of Stock A and 50% of Stock B a. What is the expected return and standard deviation of returns for each of the two stocks? b. What is the expected return and standard deviation of returns for the portfolio? c. Is the portfolio more or less risky than the two stocks? Why? a. What is the expected return and standard deviation of returns for each of the two stocks? The expected return of Stock Als % (Round to one decimal place) The expected return of Stock B is % (Round to one decimal place.) The standard deviation of Stock Ais (Round to five decimal places.) The standard deviation of Stock Bis (Round to five decimal places.) b. What is the expected return and standard deviation of returns for the portfolio? The rartadtratum falin rammer fo% Sinek A and Sink Riel Rundin me arimallara Click to select your answer(s).

Answer 1

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STATS -Microsoft Excel (Product Activation Failed) Review File Home Insert Page Layout Formulas Data View Add-Ins E AutoSum - Cut A A Wrap Text Calibri 11 General Copy Fill Merge & Center $ % Insert Delete Format Paste +.0 .00 .00 0 Conditional Format Cell Sort & Find & Filter Select BIU A Format Painter Clear Formatting as Table Styles Editing Clipboard Font Alignment Number Styles Cells fr QM18 Formula Bar QM QC QD QE QF QG QH QI QJ QL QN पा 1 XBAR 1 YBAR 1 2 STOCK A STOCK B YEAR (X- XBAR)A2 (Y-YBAR)A2 3 Y . 4 2 0 1 1 5 2 5 -3 16 16 6 3 -6 8 49 49 7 4 -1 4 4 5 -2 4 9 9 4 -2 88.00 88.00 10 (X-XBAR)A2 TOTAL RETURN Σ(Υ-ΥΒAR)2 11 6 6 12 EXPECTED RETURN 1 a 1 [6/6] [6/6] 13 14 n NO OF OBSERVATIONS 2(X-XBAR)^2/ n-1 88/5 Z(Y-YBAR)A2/n-1 15 VARIANCE |88/5 16 17 17.6 17.6 18 SQRT(17.6) SQRT(17.6) 19 a 2 STANDARD DEVIATION SQRT(VARIANCE) 20 4.1952 4.1952 IN DECIMALS] TREND freq 21 0.04195 0.04195 HYPOTHI MEAN STDV assignment DEAR Sheet2 COV TIME SERIES INTERVAL, NORMAL PV FV DIVIDEND EMV corr REGRESSION MATRIX range CAMERA Rea erences 120% + WA 02:56 ENG 31-10-2019

STATS -Microsoft Excel (Product Activation Failed) Review File Home Insert Page Layout Formulas Data View Add-Ins Σ AutoSum - Cut A A Wrap Text Calibri 11 General Copy Fill Merge & Center Paste $ %, +.0 .00 .00 0 Conditional Format Cell Insert Delete Format Sort & Find & Filter Select BIU Format Painter Clear Formatting as Table Styles Number Cells Editing Clipboard Font Alignment Styles fr QL39 QK QC QD QE QF OG QH QI QJ QL QM ON XBAR 1 22 RETURNS (X- XBAR)A2 23 YEAR PORTFOLIO 24 1 1 0 25 2 1 0 26 3 1 0 27 4 1 0 28 5 1 0 29 6 1 0 30 0.00 (X-XBAR)^2 31 TOTAL RETURN 6 b-1 32 PORTFOLIO RETURN 1 XBAR 1 = [6/6] 33 34 n NO OF OBSERVATIONS E(X-XBAR)^2/n-1 0.00/5 35 VARIANCE 36 37 38 SQRT(0) = b-2 39 STANDARD DEVIATION 0 40 41 A PORTFOLIO IS LESS RISKY C STANDARD DEVIATION OF PORTFOLIO 0, AND THAT OF STOCKS 0.04195 DEAR 42 Sheet2 COV TIME SERIES corr REGRESSION TREND freq HYPOTHI MEAN STDVassignment range CAMERA PV FV DIVIDEND EMV MATRIX INTERVAL, NORMAL Rea erences 120% WA 02:57 ENG 31-10-2019