Instructions in detail:

As a graduate student, you are employed as a finance intern at Berghaus and Associates. Harry Berghaus, one of the firm's founders has been talking to you about managing a portfolio.

As with any investment, you are concerned about the risk and potential return. More specifically, because the company holds a diversified portfolio, you want to analyses the risk and return of two different portfolios for a 2 weeks period.

Select any 4 companies (preferably listed on the JSE). You have R100 000 to invest in each portfolio (notional amounts). Choose your own weightings. So you are purchasing hypothetical shares worth R100000 for each portfolio.

Monitor the movement in your shares daily (opening and closing prices).After a 2-weeks period, you need to sell your notional investment.

Required

• Calculate the return of each portfolio (use geometric returns)./10/
• Calculate the standard deviation of each portfolio. (You need to calculate the correlation between the returns first). /10/
• Analyze the risk and return of each portfolio and recommend your choice to Harry Berghaus and provide justifications./15/