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Assignment: Provide a quick rundown of Daniel's situation. Discuss strategies and goals of how can he add value. Think about issues such as efficiency, risk-return,

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Assignment: Provide a quick rundown of Daniel's situation. Discuss strategies and goals of how can he add value. Think about issues such as efficiency, risk-return, and how to add value. Include a recommendation of a portfolio make-up (weights, or even suggestions of other stocks). 1. Estimate and compare the risk and return of each stock and the S&P 500 (i.e. annual standard deviation over the past five years). Which stock appears to be riskiest? How might the expected return of each stock relate to its riskiness? 2. If the portfolio was equally weighted (20% in all stocks and ETF) what is the resulting portfolio position (risk and return)? How does the variability of each stock affect the portfolio? How does this relate to your answer in question 1 above? How would the portfolio risk and return change if 50% of it is in SBUX, 20% in SPY, and 10% in each of the remainder securities. 2 TT Sny RF Table 1: Monthly Returns for Daniel's Portfolio and risk-free rate Date SPY SBUX GM VZ XPO 1/1/2014 -3.52% -9.26% -11.72% -2.28% -5.21% 2/1/2014 4.55% -0.22% 0.33% 0.16% 26.16% 3/1/2014 0.39% 3.41% -4.92% -0.02% -6.46% 4/1/2014 0.70% -3.76% 0.17% -1.77% -7.72% 5/1/2014 2.32% 3.71% 0.29% 8.10% -7.41% 6/1/2014 1.58% 5.65% 4.97% -2.06% 13.89% 7/1/2014 -1.34% 0.39% -6.83% 3.05% 7.93% 8/1/2014 3.95% 0.17% 2.90% -0.13% 0.26% 9/1/2014 -1.84% -3.02% -8.22% 0.34% 21.63% 10/1/2014 2.36% 0.13% -1.69% 0.52% 5.97% 11/1/2014 2.75% 7.48% 6.46% 1.80% -3.11% 12/1/2014 -0.80% 1.03% 4.43% -7.53% 5.69% 1/1/2015 -2.96% 6.68% -6.56% -2.29% -10.00% 2/1/2015 5.62% 6.81% 14.38% 9.46% 20.01% 3/1/2015 -2.01% 1.29% 0.51% -1.66% 2.99% 4/1/2015 0.98% 4.71% -6.51% 3.72% 6.66% 5/1/2015 1.29% 4.80% 2.60% -0.88% 1.36% 6/1/2015 -2.49% 3.19% -7.34% -5.72% -8.10% 7/1/2015 2.21% 8.04% -5.46% 0.39% -4.05% 8/1/2015 -5.36% -3.42% -6.57% -0.51% -19.03% 9/1/2015 -3.80% 1.59% 1.97% -5.43% -32.11% 0.04% 0.05% 0.05% 0.03% 0.03% 0.04% 0.03% 0.03% 0.02% 0.02% 0.02% 0.03% 0.03% 0.02% 0.03% 0.02% 0.02% 0.02% 0.03% 0.07% 0.02% 10/1/2015 11/1/2015 12/1/2015 1/1/2016 2/1/2016 3/1/2016 4/1/2016 5/1/2016 6/1/2016 7/1/2016 8/1/2016 9/1/2016 10/1/2016 11/1/2016 12/1/2016 1/1/2017 2/1/2017 3/1/2017 4/1/2017 5/1/2017 6/1/2017 7/1/2017 8/1/2017 9/1/2017 10/1/2017 11/1/2017 12/1/2017 1/1/2018 2/1/2018 3/1/2018 4/1/2018 5/1/2018 6/1/2018 7/1/2018 8/1/2018 9/1/2018 10/1/2018 11/1/2018 12/1/2018 9.03% -0.10% -2.31% 4.98% -0.08% 6.18% 0.39% 1.70% -0.17% 3.65% 0.12% -0.50% -1.73% 3.68% 1.43% 1.79% 3.93% -0.31% 0.99% 1.41% 0.15% 2.06% 0.29% 1.51% 2.36% 3.06% 0.70% 5.64% -3.64% -3.13% 10.08% -1.89% -2.22% 1.23% 4.21% 2.56% -5.81% -2.38% 4.06% 1.63% -3.14% 3.72% -1.98% 9.23% -4.23% -0.54% 2.99% 2.67% 2.86% 5.91% -8.33% -7.43% 1.63% -2.10% 2.10% 5.43% -0.67% -1.08% 0.51% 1.38% -0.55% -1.56% -13.80% 7.25% 2.02% 6.34% 2.52% 14.50% 16.29% 3.70% -6.05% -12.85% -0.67% 6.76% 1.18% -1.64% -9.53% 11.45% 1.20% -0.47% -0.54% 9.27% 0.90% 5.08% 0.63% -4.02% -2.04% -2.05% 2.959 3.01% 1.56% 10.51% 6.44% 0.26% -4.87% 3.46% -7.22% -7.65% 7.75% -1.79% 1.69% 8.11% 2.77% 6.60% -5.81% 0.98% 9.71% -0.77% 4.61% -0.67% -7.46% 4.92% 6.97% -8.19% 2.35% -1.77% -5.83% 2.80% -4.25% 8.37% 0.41% 3.17% -3.27% 7.58% 4.01% 2.15% -10.70% 0.17% 3.20% -2.19% 5.54% 2.64% 6.51% -1.80% 6.93% 6.79% -3.55% 16.49% 9.87% -10.66% -16.15% 8.36% 23.99% -1.82% -2.92% -10.25% 12.80% 20.86% 2.43% -10.20% 35.23% -3.08% 3.66% 13.97% -6.08% 3.13% 6.50% 22.87% -6.99% 1.81% 10.75% 2.32% 13.96% 15.89% 3.11% 4.22% 3.43% -4.57% 8.33% -4.82% -0.46% 6.80% 7.20% -21.71% -15.13% -5.21% 0.02% 0.12% 0.23% 0.26% 0.31% 0.29% 0.23% 0.27% 0.27% 0.30% 0.30% 0.29% 0.33% 0.45% 0.51% 0.51% 0.52% 0.74% 0.80% 0.89% 8% 1.07% 1.01% 1.03% 1.07% 1.23% 1.32% 1.41% 1.57% 1.70% 1.76% 0.52% 2.43% 1.10% 16.22% 1.86% -7.73% 0.13% 3.70% 3.19% 0.14% -6.91% 1.85% 1.90% 1.96% 2.03% 2.13% -3.78% -4.91% -6.60% 8.67% 3.72% 1.32% 2.25% 2.33% 1.32% 1.17% 2.37% Assignment: Provide a quick rundown of Daniel's situation. Discuss strategies and goals of how can he add value. Think about issues such as efficiency, risk-return, and how to add value. Include a recommendation of a portfolio make-up (weights, or even suggestions of other stocks). 1. Estimate and compare the risk and return of each stock and the S&P 500 (i.e. annual standard deviation over the past five years). Which stock appears to be riskiest? How might the expected return of each stock relate to its riskiness? 2. If the portfolio was equally weighted (20% in all stocks and ETF) what is the resulting portfolio position (risk and return)? How does the variability of each stock affect the portfolio? How does this relate to your answer in question 1 above? How would the portfolio risk and return change if 50% of it is in SBUX, 20% in SPY, and 10% in each of the remainder securities. 2 TT Sny RF Table 1: Monthly Returns for Daniel's Portfolio and risk-free rate Date SPY SBUX GM VZ XPO 1/1/2014 -3.52% -9.26% -11.72% -2.28% -5.21% 2/1/2014 4.55% -0.22% 0.33% 0.16% 26.16% 3/1/2014 0.39% 3.41% -4.92% -0.02% -6.46% 4/1/2014 0.70% -3.76% 0.17% -1.77% -7.72% 5/1/2014 2.32% 3.71% 0.29% 8.10% -7.41% 6/1/2014 1.58% 5.65% 4.97% -2.06% 13.89% 7/1/2014 -1.34% 0.39% -6.83% 3.05% 7.93% 8/1/2014 3.95% 0.17% 2.90% -0.13% 0.26% 9/1/2014 -1.84% -3.02% -8.22% 0.34% 21.63% 10/1/2014 2.36% 0.13% -1.69% 0.52% 5.97% 11/1/2014 2.75% 7.48% 6.46% 1.80% -3.11% 12/1/2014 -0.80% 1.03% 4.43% -7.53% 5.69% 1/1/2015 -2.96% 6.68% -6.56% -2.29% -10.00% 2/1/2015 5.62% 6.81% 14.38% 9.46% 20.01% 3/1/2015 -2.01% 1.29% 0.51% -1.66% 2.99% 4/1/2015 0.98% 4.71% -6.51% 3.72% 6.66% 5/1/2015 1.29% 4.80% 2.60% -0.88% 1.36% 6/1/2015 -2.49% 3.19% -7.34% -5.72% -8.10% 7/1/2015 2.21% 8.04% -5.46% 0.39% -4.05% 8/1/2015 -5.36% -3.42% -6.57% -0.51% -19.03% 9/1/2015 -3.80% 1.59% 1.97% -5.43% -32.11% 0.04% 0.05% 0.05% 0.03% 0.03% 0.04% 0.03% 0.03% 0.02% 0.02% 0.02% 0.03% 0.03% 0.02% 0.03% 0.02% 0.02% 0.02% 0.03% 0.07% 0.02% 10/1/2015 11/1/2015 12/1/2015 1/1/2016 2/1/2016 3/1/2016 4/1/2016 5/1/2016 6/1/2016 7/1/2016 8/1/2016 9/1/2016 10/1/2016 11/1/2016 12/1/2016 1/1/2017 2/1/2017 3/1/2017 4/1/2017 5/1/2017 6/1/2017 7/1/2017 8/1/2017 9/1/2017 10/1/2017 11/1/2017 12/1/2017 1/1/2018 2/1/2018 3/1/2018 4/1/2018 5/1/2018 6/1/2018 7/1/2018 8/1/2018 9/1/2018 10/1/2018 11/1/2018 12/1/2018 9.03% -0.10% -2.31% 4.98% -0.08% 6.18% 0.39% 1.70% -0.17% 3.65% 0.12% -0.50% -1.73% 3.68% 1.43% 1.79% 3.93% -0.31% 0.99% 1.41% 0.15% 2.06% 0.29% 1.51% 2.36% 3.06% 0.70% 5.64% -3.64% -3.13% 10.08% -1.89% -2.22% 1.23% 4.21% 2.56% -5.81% -2.38% 4.06% 1.63% -3.14% 3.72% -1.98% 9.23% -4.23% -0.54% 2.99% 2.67% 2.86% 5.91% -8.33% -7.43% 1.63% -2.10% 2.10% 5.43% -0.67% -1.08% 0.51% 1.38% -0.55% -1.56% -13.80% 7.25% 2.02% 6.34% 2.52% 14.50% 16.29% 3.70% -6.05% -12.85% -0.67% 6.76% 1.18% -1.64% -9.53% 11.45% 1.20% -0.47% -0.54% 9.27% 0.90% 5.08% 0.63% -4.02% -2.04% -2.05% 2.959 3.01% 1.56% 10.51% 6.44% 0.26% -4.87% 3.46% -7.22% -7.65% 7.75% -1.79% 1.69% 8.11% 2.77% 6.60% -5.81% 0.98% 9.71% -0.77% 4.61% -0.67% -7.46% 4.92% 6.97% -8.19% 2.35% -1.77% -5.83% 2.80% -4.25% 8.37% 0.41% 3.17% -3.27% 7.58% 4.01% 2.15% -10.70% 0.17% 3.20% -2.19% 5.54% 2.64% 6.51% -1.80% 6.93% 6.79% -3.55% 16.49% 9.87% -10.66% -16.15% 8.36% 23.99% -1.82% -2.92% -10.25% 12.80% 20.86% 2.43% -10.20% 35.23% -3.08% 3.66% 13.97% -6.08% 3.13% 6.50% 22.87% -6.99% 1.81% 10.75% 2.32% 13.96% 15.89% 3.11% 4.22% 3.43% -4.57% 8.33% -4.82% -0.46% 6.80% 7.20% -21.71% -15.13% -5.21% 0.02% 0.12% 0.23% 0.26% 0.31% 0.29% 0.23% 0.27% 0.27% 0.30% 0.30% 0.29% 0.33% 0.45% 0.51% 0.51% 0.52% 0.74% 0.80% 0.89% 8% 1.07% 1.01% 1.03% 1.07% 1.23% 1.32% 1.41% 1.57% 1.70% 1.76% 0.52% 2.43% 1.10% 16.22% 1.86% -7.73% 0.13% 3.70% 3.19% 0.14% -6.91% 1.85% 1.90% 1.96% 2.03% 2.13% -3.78% -4.91% -6.60% 8.67% 3.72% 1.32% 2.25% 2.33% 1.32% 1.17% 2.37%

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