In: Finance
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