b) (5 points) Assume that you have a hypothetical portfolio of 30% (stock 1) and 70% (stock 2 ). Calculate the portfolio mean return and standard deviation of this portfolio.

Date Oca.09 Sub.09 Mar.09 Nis.09 May.09 Haz.09 Coca Cola 21,36 20,43 21,98 21,52 Mean Variance Sigma Covariance Correlation 24,58 24 24,92 24,39 Tem.09 Au.09 Eyl.09 Eki.09 Caterpillar 30,85 24,61 27,96 35,58 35,46 33,04 44,06 45,31 51,33 55,06 58,39 56,99 52,24 57,05 62,85 68,09 60,76 60,07 69,75 65,16 78,68 Sample portfolio computation Proportion of K Proportion of IBM Portfolio Mean Portfolio Sigma Kas.09 Ara.09 Oca. 10 ub.10 Mar.10 Nis. 10 May.10 Haz.10 Tem. 10 Au.10 Eyl.10 Eki.10 78,6 Kas.10 26,85 26,66 28,6 28,5 27,12 26,36 27,5 26,73 25,7 25,06 27,55 27,94 29,26 30,66 31,59 32,88 31,43 31,96 33,17 33,73 33,41 33,65 34,01 35,23 33,78 34,16 33,62 34,98 33,77 Ara.10 Oca. 11 ub.11 Mar.11 Nis 11 May 11 Haz.11 Tem. 11 Au.11 Eyl.11 Eki 11 84,6 93,66 97,01 102,93 111,35 115,41 105,8 106,46 98,79 91 73,84 94,46 97,88 90,6 Kas.11 Ara.11 Oca. 12 109,12 Date Oca.09 Sub.09 Mar.09 Nis.09 May.09 Haz.09 Coca Cola 21,36 20,43 21,98 21,52 Mean Variance Sigma Covariance Correlation 24,58 24 24,92 24,39 Tem.09 Au.09 Eyl.09 Eki.09 Caterpillar 30,85 24,61 27,96 35,58 35,46 33,04 44,06 45,31 51,33 55,06 58,39 56,99 52,24 57,05 62,85 68,09 60,76 60,07 69,75 65,16 78,68 Sample portfolio computation Proportion of K Proportion of IBM Portfolio Mean Portfolio Sigma Kas.09 Ara.09 Oca. 10 ub.10 Mar.10 Nis. 10 May.10 Haz.10 Tem. 10 Au.10 Eyl.10 Eki.10 78,6 Kas.10 26,85 26,66 28,6 28,5 27,12 26,36 27,5 26,73 25,7 25,06 27,55 27,94 29,26 30,66 31,59 32,88 31,43 31,96 33,17 33,73 33,41 33,65 34,01 35,23 33,78 34,16 33,62 34,98 33,77 Ara.10 Oca. 11 ub.11 Mar.11 Nis 11 May 11 Haz.11 Tem. 11 Au.11 Eyl.11 Eki 11 84,6 93,66 97,01 102,93 111,35 115,41 105,8 106,46 98,79 91 73,84 94,46 97,88 90,6 Kas.11 Ara.11 Oca. 12 109,12