1. Consider a stock with the following return information for 2015-2020 Year Return 2015 25% 2016 ...

1. Consider a stock with the following return information for 2015-2020

Year Return

2015 25%

2016 -15%

2017 3%

2018 41%

2019 -6%

2020 12%

Find the following for your sample of returns: Average Return, Variance, and Standard Deviation.

2. Jamie’s portfolio consists of $15,000 in Microsoft stock and $45,000 in Coca Cola. Microsoft has an expected return of 19% annually with a standard deviation of 42%. Coca Cola has an expected return of 10% annually with a standard deviation of 20%. The correlation between the 2 stocks has been 0.3.

a) Calculate the expected return of Jamie’s portfolio

b) Calculate the standard deviation of Jamie’s portfolio

Expert Solution

jeff jeffy answered 2 years ago

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