Question

The 5 stocks are as follows: Microsoft, Amazon, Macy’s, Facebook, and Apple. Create a portfolio that invests 24% of $1 million in company A, 22% in company B, 20% in company C, 18% in company D, and 16% in company E.

What is the buy-and-hold return (HPR) for each of the 5 stocks and for the portfolio during the last calendar year (2018). This means you are buying on Dec 31, after markets close, and selling on Dec 31 of the following year, after markets close. Please make sure to show your work. You will need stock price/return data on the 5 companies. To get the stock price/return data, go to Yahoo Finance, enter the ticker, click on “Historical Prices”, select the start and end date, and make sure “daily” is selected. Click on “Get Prices”, and use Adj. Close to calculate returns (Adj. Close adjusts for dividends, stock splits, etc.).

Answer 1