Question
I have completed up to question 3 on this project. Can you provide assistance for 4, 5, and 6 please? Go to http://finance.yahoo.com, download monthly
I have completed up to question 3 on this project. Can you provide assistance for 4, 5, and 6 please?
Go to http://finance.yahoo.com, download monthly Adj. close prices (adjusted for dividend and stock split) from 01/01/2013 through 12/31/2018 for the following three companies. You can use a monthly risk free rate of 0.05% for related analysis.
Company
Ticker
APPLE
AAPL
WALMART
WMT
GOLDMAN SACHS
GS
Q1: (6') List dates, Adj. close prices, and monthly holding period returns for the three companies.
Q2: (6') Compute monthly holding period return using Adj. close prices for each stock.
Q3: (6') Use the EXCEL statistical functions to compute mean (AVERAGE) and standard deviation (STDEV) of the monthly return for each stock.
Assume that historical mean returns are good estimates of expected returns.
To achieve diversification, John invests in APPLE and WALMART.
Q4: What are the weights on the two stocks to achieve the optimal risky portfolio for John (4')? What are the mean and standard deviation of returns on his optimal risky portfolio (4')? Must show your calculation by including the formulas you used (4').
Mary instead invests in APPLE and GOLDMAN SACHS.
Q5: What are the weights on the two stocks to achieve the optimal risky portfolio for Mary (4')? What are the mean and standard deviation of returns on her optimal risky portfolio (4')? Must show your calculation by including the formulas you used (2').
Q6: Discuss whose optimal portfolio performs better (John or Mary) (5'), and explain why (5').
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