Make a portfolio of 3 companies: Costco, Walmart, Toyota and Netflix (2015-present)

a. Why did you choose these companies? Why did you choose those specific weights?

b. What is the return and standard deviation of each stock?

Compare the returns and SDs. Which has the higher return? Which has the higher risk? Did you expect this why?

Calculate Beta. What is Beta? What does the beta of your company indicate?

c. What is the portfolio return? What is the portfolio standard deviation?

d. What is the correlation of the portfolio? What does this mean?

e. What is the expected return according to CAPM? (first, you will need to know the portfolio Beta, for risk-free rate you use data from the three-month (90-day) treasury bill rate, and for market return you can use data from S&P 500 index.)

f. Calculate the Sharpe ratio for the portfolio. What does this indicate?