2nd picture is not correct.In this picture "December" is not showing. Alternative picture is last one(4 th picture) for this 2nd picture.

Objectives of the Assignment: 1. Calculate the average returns, standard deviation of returns and coefficient of variation of stocks assigned to you - first for the individual stocks and for the portfolio of the four stocks assigned to you. 2. Calculating betas of stocks assigned to you - first the betas of individual stocks and the beta of the portfolio of the 4 stocks assigned to you. 3. Assuming that the risk free rate of return to be 6% and expected rate of the return of the market portfolio to be 10%, find out the equation of the security market line and then draw the security market line. 4. Calculate the annualized average return of individual stocks assigned to you and then locate the portfolio of your stocks. Data 1. Monthly returns for 60 months from January 2015 to December 2019 was provided. (2nd picture) 2. Monthly returns for 60 months for the market portfolio are also provided in the separate picture.(3rd picture) Methodology 1. To calculate beta of an asset, j, we have to use the following formulae: Cov();,1M) A,= 0 You can use Excel spread-sheet to calculate beta. 2. To calculate the beta of a portfolio, use the following: i=1 Di ; where n is the number of stocks in the portfolio. n You can use Excel Spread-sheet to calculate the beta of the portfolio. 3. To calculate annualized average return of stocks or portfolio, multiply the average monthly returns by 12. Deliverables 1. A Report containing the following: a. Average return systematic risk relationship of stocks assigned. b. Average return systematic risk relationship of portfolio of stocks assigned. c. The conclusion that can be drawn based on the results. 18 june SL Month Year RSRMSTT NAVANA BDAUTO NPOLYMA 1 january 2015 0.03 -0.103 -0.066 0.0419 2 february 2015 0.0096 -0.073 -0.014 0.0797 3 march 2015 -0.039 0.0079 -0.134 0.0238 4 april 2015 -0.045 -0.171 -0.105 -0.097 5 may 2015 -0.116 0.3475 0.1113 0.1795 6 june 2015 -0.045 -0.098 0.4272 0.0073 7 july 2015 -9E-04 0.0331 -0.078 0.203 8 august 2015 0.1416 -0.009 0.4132 0.0801 9 september 2015 0.0319 -0.068 0.1644 -0.017 10 October 2015 -0.02 -0.1 -0.031 0.0277 11 november 2015 -0.014 -0.068 -0.026 -0.025 12 december 2015 0.0382 0.1363 -0.027 -0.037 13 january 2016 0.1997 -0.058 -0.036 -0.128 14 february 2016 -0.062 -0.02 -0.157 -0.031 15) march 2016 0.0191 0.007 -0.038 -0.003 16 april 2016 0.3614 -0.048 0.075 -0.004 17 may 2016 0.0122 0.0799 0.1396 0.1638 2016 -0.091 -0.031 -0.017 -0.007 19 july 2016 0.3451 -0.021 0.0859 0.0228 20 august 2016 -0.073 0.0118 0.2157 0.1021 21 september 2016 0.1125 -0.026 0.0048 -0.035 221 October 2016 0.0138 0.06 0.416 -0.055 23 november 2016 -0.03 0.2602 0.1959 0.0234 24) december 2016 -0.019 0.2819 0.0436 0.0123 25 january 2017 -0.059 -0.066 0.1238 0.2382 26 february 2017 0.0064 0.0465 -0.05 0.117 27 march 2017 -0.082 -0.056 -0.065 0.0831 28 april 2017 0.0665 -0.017 -0.005 -0.059 29 may 2017 0.0453 0.0478 0.088 -0.025 2017 0.0004 0.0427 -0.035 0.0531 31 july 2017 0.1227 0.0311 0.2612 -0.012 32 august 2017 0.4233 -0.001 0.1943 -0.012 33 september 2017 -0.052 -0.081 -0.033 -0.028 34 october 2017 -0.046 0.0119 -0.05 -0.033 35 november 2017 0.0225 0.0398 0.0728 0.1218 36 december 2017 -0.011 -0.048 -0.068 -0.054 37 january 2018 0.1363 -0.028 0.1228 -0.09 38 february 2018 0.1559 -0.058 0.0124 -0.009 39 march 2018 -0.092 -0.096 -0.092 -0.015 40 april 2018 1.0703 0.3423 0.0604 0.0324 41 may 2018 0.3551 -0.094 -8E-04 -0.026 42 june 2018 0.5038 0.0193 2.1207 0.1381 2018 0.1819 0 0.0564 0.0601 2018 0.1813 -0.016 0.1246 -0.07 45 september 2018 0 -0.059 0 461 october 2018 -0.057 -0.245 -0.408 -0.044 47) november 2018 -0.542 0.0561 -0.145 -0.136 48 december 2018 -0.238 -0.063 0.3646 0.0472 49 january 2019 0.1785 0.0504 0.0611 0.1803 50 february 2019 0.1114 0.082 -0.207 0.0644 51 march 2019 -0.147 -0.104 -0.082 0.0011 52 april 2019 -0.351 0.0021 -0.09 0.1545 53 may 2019 -0.024 -0.07 0.0571 -0.026 2019 -0.046 -0.011 0.0956 0.0966 55 july 2019 -0.049 0.1007 -0.071 0.1144 2019 0.5428 -0.051 -0.074 -0.087 57 september 2019 0.0022 -0.015 -0.087 -0.124 58) October 2019 -0.305 -0.133 -0.221 -0.301 59 november 2019 -0.223 -0.018 0.2013 0.0233 30 june 43 july 44 august -0.056 54 june 56 august Month Year Market -0.039 2015 2015 2015 2015 2015 2015 January February March April May June Gulv August September October November December January February March April Mav 0.0189 -0.031 -0.118 0.171 0.0149 0.0638 0.021 0.0225 -0.062 -0.02 2015 2015 2015 2015 2015 2015 2016 2016 0.0172 0.0003 -0.012 -0.015 -0.018 0.0523 0.007 0.0273 0.0511 0.0208 -0.034 2016 2016 2016 2016 2016 2016 2016 June 2016 2016 2016 August September October November December January February March April Mav Lune July 2017 2017 2017 2017 2017 2017 2017 2017 August September October November December January February March April Mav June 2017 2017 2017 2017 2018 0.0789 0.1294 0.0347 0.0484 -0.016 -0.016 0.0131 0.0708 0.0516 0.0356 -0.041 -0.013 0.0728 0.0053 0.0063 0.0118 -0.054 0.0333 -0.031 0.0686 0.0059 -0.002 -0.027 2018 2018 2018 August September October November December January February March April Mav 2018 2018 2018 2018 2018 2018 2018 2018 2019 2019 -0.041 0.0002 0.0303 0.084 -0.023 -0.035 -0.038 2019 2019 2019 June 2019 0.0145 0.0053 -0.065 0.0115 2019 2019 2019 August September October November December -0.053 -0.085 2019 2019 2019 0.0092 -0.056 7 july 2017 -0.005 29 may SL Month Year RSRMSTT NAVANA BDAUTO NPOLYMA 1 january 2015 0.03 -0.103 -0.066 0.0419 2 february 2015 0.0096 -0.073 -0.014 0.0797 3 march 2015 -0.039 0.0079 -0.134 0.0238 4 april 2015 -0.045 -0.171 -0.105 -0.097 5 may 2015 -0.116 0.3475 0.1113 0.1795 6 june 2015 -0.045 -0.098 0.4272 0.0073 2015 -9E-04 0.0331 -0.078 0.203 8 august 2015 0.1416 -0.009 0.4132 0.0801 9 september 2015 0.0319 -0.068 0.1644 -0.017 10 October 2015 -0.02 -0.1 -0.031 0.0277 11 november 2015 -0.014 -0.068 -0.026 -0.025 12 december 2015 0.0382 0.1363 -0.027 -0.037 13 january 2016 0.1997 -0.058 -0.036 -0.128 14 february 2016 -0.062 -0.02 -0.157 -0.031 15 march 2016 0.0191 0.007 -0.038 -0.003 16 april 2016 0.3614 -0.048 0.075 -0.004 17 may 2016 0.0122 0.0799 0.1396 0.1638 18 june 2016 -0.091 -0.031 -0.017 -0.007 19 july 2016 0.3451 -0.021 0.0859 0.0228 20 august 2016 -0.073 0.0118 0.2157 0.1021 21 september 2016 0.1125 -0.026 0.0048 -0.035 22October 2016 0.0138 0.06 0.416 -0.055 23 november 2016 -0.03 0.2602 0.1959 0.0234 24 december 2016 -0.019 0.2819 0.0436 0.0123 25 january -0.059 -0.066 0.1238 0.2382 26 february 2017 0.0064 0.0465 -0.05 0.117 27 march 2017 -0.082 -0.056 -0.065 0.0831 28 april 2017 0.0665 -0.017 -0.059 2017 0.0453 0.0478 0.088 -0.025 30 june 2017 0.0004 0.0427 -0.035 0.0531 31 july 2017 0.1227 0.0311 0.2612 -0.012 32 august 2017 0.4233 -0.001 0.1943 -0.012 33 september 2017 -0.052 -0.081 -0.033 -0.028 34) October 2017 -0.046 0.0119 -0.05 -0.033 35 november 2017 0.0225 0.0398 0.0728 0.1218 36 december 2017 -0.011 -0.048 -0.068 -0.054 37 january 2018 0.1363 -0.028 0.1228 -0.09 38 february 2018 0.1559 -0.058 0.0124 -0.009 39 march 2018 -0.092 -0.096 -0.092 -0.015 40 april 2018 1.0703 0.3423 0.0604 0.0324 41 may 2018 0.3551 -0.094 -8E-04 -0.026 2018 0.5038 0.0193 2.1207 0.1381 2018 0.1819 0 0.0564 0.0601 44 august 2018 0.1813 -0.016 0.1246 -0.07 45 september 2018 0 -0.059 0 -0.056 46 october 2018 -0.057 -0.245 -0.408 -0.044 471 november 2018 -0.542 0.0561 -0.145 -0.136 481 december 2018 -0.238 -0.063 0.3646 0.0472 49 january 2019 0.1785 0.0504 0.0611 0.1803 50 february 2019 0.1114 0.082 -0.207 0.0644 51 march 2019 -0.147 -0.104 -0.082 0.0011 52) april 2019 -0.351 0.0021 -0.09 0.1545 53 may 2019 -0.024 -0.07 0.0571 -0.026 54 june 2019 -0.046 -0.011 0.0956 0.0966 2019 -0.049 0.1007 -0.071 0.1144 56 august 2019 0.5428 -0.051 -0.074 -0.087 57 september 2019 0.0022 -0.015 -0.087 -0.124 58 october 2019 -0.305 -0.133 -0.221 -0.301 59 november 2019 -0.223 -0.018 0.2013 0.0233 60 december 2019 -0.026 -0.122 -0.178 -0.118 42 june 43 july 55 july Objectives of the Assignment: 1. Calculate the average returns, standard deviation of returns and coefficient of variation of stocks assigned to you - first for the individual stocks and for the portfolio of the four stocks assigned to you. 2. Calculating betas of stocks assigned to you - first the betas of individual stocks and the beta of the portfolio of the 4 stocks assigned to you. 3. Assuming that the risk free rate of return to be 6% and expected rate of the return of the market portfolio to be 10%, find out the equation of the security market line and then draw the security market line. 4. Calculate the annualized average return of individual stocks assigned to you and then locate the portfolio of your stocks. Data 1. Monthly returns for 60 months from January 2015 to December 2019 was provided. (2nd picture) 2. Monthly returns for 60 months for the market portfolio are also provided in the separate picture.(3rd picture) Methodology 1. To calculate beta of an asset, j, we have to use the following formulae: Cov();,1M) A,= 0 You can use Excel spread-sheet to calculate beta. 2. To calculate the beta of a portfolio, use the following: i=1 Di ; where n is the number of stocks in the portfolio. n You can use Excel Spread-sheet to calculate the beta of the portfolio. 3. To calculate annualized average return of stocks or portfolio, multiply the average monthly returns by 12. Deliverables 1. A Report containing the following: a. Average return systematic risk relationship of stocks assigned. b. Average return systematic risk relationship of portfolio of stocks assigned. c. The conclusion that can be drawn based on the results. 18 june SL Month Year RSRMSTT NAVANA BDAUTO NPOLYMA 1 january 2015 0.03 -0.103 -0.066 0.0419 2 february 2015 0.0096 -0.073 -0.014 0.0797 3 march 2015 -0.039 0.0079 -0.134 0.0238 4 april 2015 -0.045 -0.171 -0.105 -0.097 5 may 2015 -0.116 0.3475 0.1113 0.1795 6 june 2015 -0.045 -0.098 0.4272 0.0073 7 july 2015 -9E-04 0.0331 -0.078 0.203 8 august 2015 0.1416 -0.009 0.4132 0.0801 9 september 2015 0.0319 -0.068 0.1644 -0.017 10 October 2015 -0.02 -0.1 -0.031 0.0277 11 november 2015 -0.014 -0.068 -0.026 -0.025 12 december 2015 0.0382 0.1363 -0.027 -0.037 13 january 2016 0.1997 -0.058 -0.036 -0.128 14 february 2016 -0.062 -0.02 -0.157 -0.031 15) march 2016 0.0191 0.007 -0.038 -0.003 16 april 2016 0.3614 -0.048 0.075 -0.004 17 may 2016 0.0122 0.0799 0.1396 0.1638 2016 -0.091 -0.031 -0.017 -0.007 19 july 2016 0.3451 -0.021 0.0859 0.0228 20 august 2016 -0.073 0.0118 0.2157 0.1021 21 september 2016 0.1125 -0.026 0.0048 -0.035 221 October 2016 0.0138 0.06 0.416 -0.055 23 november 2016 -0.03 0.2602 0.1959 0.0234 24) december 2016 -0.019 0.2819 0.0436 0.0123 25 january 2017 -0.059 -0.066 0.1238 0.2382 26 february 2017 0.0064 0.0465 -0.05 0.117 27 march 2017 -0.082 -0.056 -0.065 0.0831 28 april 2017 0.0665 -0.017 -0.005 -0.059 29 may 2017 0.0453 0.0478 0.088 -0.025 2017 0.0004 0.0427 -0.035 0.0531 31 july 2017 0.1227 0.0311 0.2612 -0.012 32 august 2017 0.4233 -0.001 0.1943 -0.012 33 september 2017 -0.052 -0.081 -0.033 -0.028 34 october 2017 -0.046 0.0119 -0.05 -0.033 35 november 2017 0.0225 0.0398 0.0728 0.1218 36 december 2017 -0.011 -0.048 -0.068 -0.054 37 january 2018 0.1363 -0.028 0.1228 -0.09 38 february 2018 0.1559 -0.058 0.0124 -0.009 39 march 2018 -0.092 -0.096 -0.092 -0.015 40 april 2018 1.0703 0.3423 0.0604 0.0324 41 may 2018 0.3551 -0.094 -8E-04 -0.026 42 june 2018 0.5038 0.0193 2.1207 0.1381 2018 0.1819 0 0.0564 0.0601 2018 0.1813 -0.016 0.1246 -0.07 45 september 2018 0 -0.059 0 461 october 2018 -0.057 -0.245 -0.408 -0.044 47) november 2018 -0.542 0.0561 -0.145 -0.136 48 december 2018 -0.238 -0.063 0.3646 0.0472 49 january 2019 0.1785 0.0504 0.0611 0.1803 50 february 2019 0.1114 0.082 -0.207 0.0644 51 march 2019 -0.147 -0.104 -0.082 0.0011 52 april 2019 -0.351 0.0021 -0.09 0.1545 53 may 2019 -0.024 -0.07 0.0571 -0.026 2019 -0.046 -0.011 0.0956 0.0966 55 july 2019 -0.049 0.1007 -0.071 0.1144 2019 0.5428 -0.051 -0.074 -0.087 57 september 2019 0.0022 -0.015 -0.087 -0.124 58) October 2019 -0.305 -0.133 -0.221 -0.301 59 november 2019 -0.223 -0.018 0.2013 0.0233 30 june 43 july 44 august -0.056 54 june 56 august Month Year Market -0.039 2015 2015 2015 2015 2015 2015 January February March April May June Gulv August September October November December January February March April Mav 0.0189 -0.031 -0.118 0.171 0.0149 0.0638 0.021 0.0225 -0.062 -0.02 2015 2015 2015 2015 2015 2015 2016 2016 0.0172 0.0003 -0.012 -0.015 -0.018 0.0523 0.007 0.0273 0.0511 0.0208 -0.034 2016 2016 2016 2016 2016 2016 2016 June 2016 2016 2016 August September October November December January February March April Mav Lune July 2017 2017 2017 2017 2017 2017 2017 2017 August September October November December January February March April Mav June 2017 2017 2017 2017 2018 0.0789 0.1294 0.0347 0.0484 -0.016 -0.016 0.0131 0.0708 0.0516 0.0356 -0.041 -0.013 0.0728 0.0053 0.0063 0.0118 -0.054 0.0333 -0.031 0.0686 0.0059 -0.002 -0.027 2018 2018 2018 August September October November December January February March April Mav 2018 2018 2018 2018 2018 2018 2018 2018 2019 2019 -0.041 0.0002 0.0303 0.084 -0.023 -0.035 -0.038 2019 2019 2019 June 2019 0.0145 0.0053 -0.065 0.0115 2019 2019 2019 August September October November December -0.053 -0.085 2019 2019 2019 0.0092 -0.056 7 july 2017 -0.005 29 may SL Month Year RSRMSTT NAVANA BDAUTO NPOLYMA 1 january 2015 0.03 -0.103 -0.066 0.0419 2 february 2015 0.0096 -0.073 -0.014 0.0797 3 march 2015 -0.039 0.0079 -0.134 0.0238 4 april 2015 -0.045 -0.171 -0.105 -0.097 5 may 2015 -0.116 0.3475 0.1113 0.1795 6 june 2015 -0.045 -0.098 0.4272 0.0073 2015 -9E-04 0.0331 -0.078 0.203 8 august 2015 0.1416 -0.009 0.4132 0.0801 9 september 2015 0.0319 -0.068 0.1644 -0.017 10 October 2015 -0.02 -0.1 -0.031 0.0277 11 november 2015 -0.014 -0.068 -0.026 -0.025 12 december 2015 0.0382 0.1363 -0.027 -0.037 13 january 2016 0.1997 -0.058 -0.036 -0.128 14 february 2016 -0.062 -0.02 -0.157 -0.031 15 march 2016 0.0191 0.007 -0.038 -0.003 16 april 2016 0.3614 -0.048 0.075 -0.004 17 may 2016 0.0122 0.0799 0.1396 0.1638 18 june 2016 -0.091 -0.031 -0.017 -0.007 19 july 2016 0.3451 -0.021 0.0859 0.0228 20 august 2016 -0.073 0.0118 0.2157 0.1021 21 september 2016 0.1125 -0.026 0.0048 -0.035 22October 2016 0.0138 0.06 0.416 -0.055 23 november 2016 -0.03 0.2602 0.1959 0.0234 24 december 2016 -0.019 0.2819 0.0436 0.0123 25 january -0.059 -0.066 0.1238 0.2382 26 february 2017 0.0064 0.0465 -0.05 0.117 27 march 2017 -0.082 -0.056 -0.065 0.0831 28 april 2017 0.0665 -0.017 -0.059 2017 0.0453 0.0478 0.088 -0.025 30 june 2017 0.0004 0.0427 -0.035 0.0531 31 july 2017 0.1227 0.0311 0.2612 -0.012 32 august 2017 0.4233 -0.001 0.1943 -0.012 33 september 2017 -0.052 -0.081 -0.033 -0.028 34) October 2017 -0.046 0.0119 -0.05 -0.033 35 november 2017 0.0225 0.0398 0.0728 0.1218 36 december 2017 -0.011 -0.048 -0.068 -0.054 37 january 2018 0.1363 -0.028 0.1228 -0.09 38 february 2018 0.1559 -0.058 0.0124 -0.009 39 march 2018 -0.092 -0.096 -0.092 -0.015 40 april 2018 1.0703 0.3423 0.0604 0.0324 41 may 2018 0.3551 -0.094 -8E-04 -0.026 2018 0.5038 0.0193 2.1207 0.1381 2018 0.1819 0 0.0564 0.0601 44 august 2018 0.1813 -0.016 0.1246 -0.07 45 september 2018 0 -0.059 0 -0.056 46 october 2018 -0.057 -0.245 -0.408 -0.044 471 november 2018 -0.542 0.0561 -0.145 -0.136 481 december 2018 -0.238 -0.063 0.3646 0.0472 49 january 2019 0.1785 0.0504 0.0611 0.1803 50 february 2019 0.1114 0.082 -0.207 0.0644 51 march 2019 -0.147 -0.104 -0.082 0.0011 52) april 2019 -0.351 0.0021 -0.09 0.1545 53 may 2019 -0.024 -0.07 0.0571 -0.026 54 june 2019 -0.046 -0.011 0.0956 0.0966 2019 -0.049 0.1007 -0.071 0.1144 56 august 2019 0.5428 -0.051 -0.074 -0.087 57 september 2019 0.0022 -0.015 -0.087 -0.124 58 october 2019 -0.305 -0.133 -0.221 -0.301 59 november 2019 -0.223 -0.018 0.2013 0.0233 60 december 2019 -0.026 -0.122 -0.178 -0.118 42 june 43 july 55 july