Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

3 subquestions. please include full workings You are considering investing in stocks and have identified the following potential stocks. They are Alibaba Group Holding Limited

image text in transcribed

image text in transcribed

3 subquestions. please include full workings

You are considering investing in stocks and have identified the following potential stocks. They are Alibaba Group Holding Limited (BABA), Amazon (AMZN), Kogan (KGN) and China Petroleum \& Chemical (386). The table below shows the historical share prices (\$) between 2016 and 2022. Note that these prices are recorded on the 1st day of the year, for example, 1st of January 2020. Students should assume no dividend is distributed during this period and ignore the exchange rate conversion. Calculate the expected (annual) return and standard deviation if you owned a portfolio consisting of 50% in Amazon and 50% in Alibaba. 6. (3 marks) Calculate the expected (annual) return and standard deviation if you owned a portfolio consisting of 80% in Amazon and 20% in China Petroleum. 7. (3 marks) Compare the portfolios in parts 5 or 6 . Which portfolio (parts 5 or 6 ) provides better diversification? Define diversification and explain your answer(s)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Strategic Public Finance

Authors: Stephen Bailey

1st Edition

0333922212, 978-033392221

More Books

Students also viewed these Finance questions

Question

How do our biological rhythms impact daily functioningpg12

Answered: 1 week ago