Question

In: Finance

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

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