In this assignment, students are expected to create complete portfolio made up of two risky assets in the forms of two Saudi shares trading at Tadawul, and one risk-free asset in the form of 4-week SAMA bill. This assignment is individual based and should submitted on blackboard on 31-Mar-2020.

Using excel, students should:

1)Find the expected return, variance, standard deviation for each stock using historical data from 2010-2019.

2)Determine the correlation and covariance between the two stocks.

3)Find the beta of each stock in relation to the market index TASI.

o

4)Find the portfolio's expected return, variance, standard deviations, and sharp ratio by varying weights between stock₁ and stock₂.

5)Using the Solver tool in excel, find the minimum-variance portfolio and optimal portfolio.

6)Find the complete portfolio assuming risk-free rate of 4-week SAMA bill average:

ohttp://www.sama.gov.sa/en-US/GovtSecurity/pages/SAMABills.aspx

7)Graph the above results.

Summary Report: students should provide a report detailing the reasons for choosing the two risky assets and covering the above graph and end-results.