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Consider the following annual returns on 2 stocks: (10 pts) Year HCA WLMT 2017 35% 3% 2016 20% 5% 2015 3% 9% 2014 -12% 15%
- Consider the following annual returns on 2 stocks: (10 pts)
Year | HCA | WLMT |
2017 | 35% | 3% |
2016 | 20% | 5% |
2015 | 3% | 9% |
2014 | -12% | 15% |
- Calculate the expected return on each stock. (2 pts)
- Calculate the standard deviation on each stock. (3 pts)
- Assume you create a portfolio with equal weight in each stock. Calculate the expected return of the portfolio. (2 pts)
- Calculate the standard deviation of the equally weighted portfolio. (3 pts)
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