3.1 Select 8 U.S. stocks that have prices for December 2003 thru December 2018 inclusive. Download

the data from yahoo finance. Calculate their average monthly returns and the variance/covariance matrix.

3.2 Create two portfolios, A and B, using the weights shown below. Calculate the expected return,

variance, standard deviation for each and their covariance.

S1

S2

S3

S4

S5

S6

S7

S8

Portfolio A

0.20

0.18

0.17

0.15

0.09

0.12

0.07

0.02

Portfolio B

0.05

0.09

0.13

0.15

0.19

0.23

0.05

0.11

3.3 Create portfolio C which consist of 30% portfolio A, and 70% in portfolio B. Calculate the expected

return, variance and standard deviation for portfolio C.

3.4 Using a data table, vary the proportion of portfolio A in portfolio C from -150% to 250% in 25%

increments. Show the result on Portfolio C's standard deviation and expected return.

3.5 Graph the results from the data table in 3.3 using a scatter chart. Make it similar to examples in the

chapter 8.