Calculating average return and standard deviation for a portfolio given historical data.

You have the following information for three stocks for 2015 -2019.

Rate of Return (%)

I

Year

Stock M

Stock A

Stock B

Portfolio

2015

2016

2017

2018

2019

15

20

25

20

15

25

18

12

18

22

10

15

20

16

14

17.5

16.5

16.0

17.0

18.0

>0.5(25)+0.5(10) *

0.518)+0.5(15)

>0.5(2) + 0.5(20)

> 0.5(18)+0.5(16)

0.5(22)+0.5(14)

You invested 50% of your money on stock A and 50% on stock B ( W, = 0.5 and We

above years. What were the average return and standard deviation of your portfolio?

=0.5) for each of above years. What were the average return and standard deviation of your portfolio?

Find the portfolio risk (standard deviation) and average return for the following portfolios

(use the information given in Ex. 4 above):

Portfolio

#1

#2

#3

#4

Wa

Wb

Average Return

0.2

Standard Dev.

0.8

0.4

0.6

0.6

0.4

0.8

02

Portfolio #1 means that you invested 20% of your money on stock A and 80% of your money on B shown above

Calculating average return and standard deviation for a portfolio given historical data.

You have the following information for three stocks for 2015 -2019.

RATE OF RETURN(%)

Year Stock M Stock A Stock B. Portfolio

2015. 15. 25 10. 17.5

2016. 20. 18. 15. 16.5

2017. 25. 12. 20. 16.0

2018. 20. 18. 16. 17.0

2019. 15. 22. 14 18.0

Find the portfolio risk (standard deviation) and average return for the following portfolios

(use the information given above)

Portfolio. Wa. Wb. AverageReturn Sd

1. 0.2. 0.8.

2. 0.4. 0.6

3. 0.6. 0.4

4. 0.8. 0.2

Portfolio #1 means that you invested 20% of your money on stock A and 80% of your money on B shown above

HOMEWORK III: Find the portfolio risk (standard deviation) and average return for the following portfolios (use the information given in Ex. 4 above): Portfolio 11 means tnat you mvested 20% of your money on stock A and 80% of your money on B shown above (Ex.4). HOMEWORK III: Find the portfolio risk (standard deviation) and average return for the following portfolios (use the information given in Ex. 4 above): Portfolio 11 means tnat you mvested 20% of your money on stock A and 80% of your money on B shown above (Ex.4)