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Calculate the average return and the standard deviation of a portfolio composed of 10% FGH Incorporated and 90% MNO Corporation stocks. Use the method described
Calculate the average return and the standard deviation of a portfolio composed of 10% FGH Incorporated and 90% MNO Corporation stocks. Use the method described on page 324 or 325 of the text to create a Data Table; then use the Data Table to determine a portfolio combination of the two stocks that would improve the expected return while decreasing the level of risk (standard deviation). Clearly state what portfolio combination you would recommend to meet these criteria.
\begin{tabular}{|l|c|l|} \hline Date & FGH Inc. & \multicolumn{1}{|c|}{ MNO Corp } \\ \hline 2-Jan2001 & $4.51 & $55.43 \\ \hline 2-Jan-2002 & $5.78 & $63.45 \\ \hline 2-Jan-2003 & $6.23 & $64.57 \\ \hline 2-Jan-2004 & $7.11 & $70.31 \\ \hline 2-Jan-2005 & $9.03 & $66.54 \\ \hline 2-Jan-2006 & $12.06 & $74.32 \\ \hline 2-Jan-2007 & $12.22 & $78.44 \\ \hline 2-Jan-2008 & $13.89 & $76.52 \\ \hline 2-Jan-2009 & $15.74 & $71.73 \\ \hline 2-Jan-2010 & $16.23 & $72.21 \\ \hline 2-Jan-2011 & $15.04 & $78.90 \\ \hline 2-Jan-2012 & $18.55 & $75.67 \\ \hline 2-Jan-2013 & $19.14 & $84.32 \\ \hline 2-Jan-2014 & $22.34 & $95.67 \\ \hline \end{tabular} \begin{tabular}{|l|c|l|} \hline Date & FGH Inc. & \multicolumn{1}{|c|}{ MNO Corp } \\ \hline 2-Jan2001 & $4.51 & $55.43 \\ \hline 2-Jan-2002 & $5.78 & $63.45 \\ \hline 2-Jan-2003 & $6.23 & $64.57 \\ \hline 2-Jan-2004 & $7.11 & $70.31 \\ \hline 2-Jan-2005 & $9.03 & $66.54 \\ \hline 2-Jan-2006 & $12.06 & $74.32 \\ \hline 2-Jan-2007 & $12.22 & $78.44 \\ \hline 2-Jan-2008 & $13.89 & $76.52 \\ \hline 2-Jan-2009 & $15.74 & $71.73 \\ \hline 2-Jan-2010 & $16.23 & $72.21 \\ \hline 2-Jan-2011 & $15.04 & $78.90 \\ \hline 2-Jan-2012 & $18.55 & $75.67 \\ \hline 2-Jan-2013 & $19.14 & $84.32 \\ \hline 2-Jan-2014 & $22.34 & $95.67 \\ \hline \end{tabular}
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