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Nike Date Adj Close Return Amazon Date Adj Close Return Pepisco Date Adj Close Return 2/7/2013 26.048929 2/7/2013 264.26999 2/7/2013 68.095627 3/1/2013 28.225252 8.35% 3/1/2013

Nike Date Adj Close Return Amazon Date Adj Close Return Pepisco Date Adj Close Return

2/7/2013 26.048929 2/7/2013 264.26999 2/7/2013 68.095627

3/1/2013 28.225252 8.35% 3/1/2013 266.48999 0.84% 3/1/2013 71.097336 4.41%

4/1/2013 30.42071 7.78% 4/1/2013 253.81 -4.76% 4/1/2013 74.11702 4.25%

5/1/2013 29.591532 -2.73% 5/1/2013 269.20001 6.06% 5/1/2013 72.589203 -2.06%

6/3/2013 30.560961 3.28% 6/3/2013 277.69 3.15% 6/3/2013 74.02095 1.97%

7/1/2013 30.196224 -1.19% 7/1/2013 301.22 8.47% 7/1/2013 75.604721 2.14%

8/1/2013 30.248472 0.17% 8/1/2013 280.98001 -6.72% 8/1/2013 72.156624 -4.56%

9/3/2013 34.976902 15.63% 9/3/2013 312.64002 11.27% 9/3/2013 72.461662 0.42%

10/1/2013 36.479214 4.30% 10/1/2013 364.03 16.44% 10/1/2013 76.645302 5.77%

11/1/2013 38.10672 4.46% 11/1/2013 393.62 8.13% 11/1/2013 76.982544 0.44%

12/2/2013 37.984604 -0.32% 12/2/2013 398.79001 1.31% 12/2/2013 76.113014 -1.13%

1/2/2014 35.187923 -7.36% 1/2/2014 358.69 -10.06% 1/2/2014 73.745377 -3.11%

2/3/2014 37.936481 7.81% 2/3/2014 362.10001 0.95% 2/3/2014 73.479248 -0.36%

3/3/2014 35.785294 -5.67% 3/3/2014 336.37 -7.11% 3/3/2014 77.169052 5.02%

4/1/2014 35.344395 -1.23% 4/1/2014 304.13001 -9.58% 4/1/2014 79.377846 2.86%

5/1/2014 37.38065 5.76% 5/1/2014 312.54999 2.77% 5/1/2014 81.632843 2.84%

6/2/2014 37.691711 0.83% 6/2/2014 324.78 3.91% 6/2/2014 83.183868 1.90%

7/1/2014 37.487576 -0.54% 7/1/2014 312.98999 -3.63% 7/1/2014 82.02932 -1.39%

8/1/2014 38.293026 2.15% 8/1/2014 339.04001 8.32% 8/1/2014 86.116814 4.98%

9/2/2014 43.484882 13.56% 9/2/2014 322.44 -4.90% 9/2/2014 87.293739 1.37%

10/1/2014 45.322754 4.23% 10/1/2014 305.45999 -5.27% 10/1/2014 90.181961 3.31%

11/3/2014 48.403748 6.80% 11/3/2014 338.64002 10.86% 11/3/2014 93.867264 4.09%

12/1/2014 47.007778 -2.88% 12/1/2014 310.35001 -8.35% 12/1/2014 89.254555 -4.91%

1/2/2015 45.101063 -4.06% 1/2/2015 354.53 14.24% 1/2/2015 88.518318 -0.82%

2/2/2015 47.619724 5.58% 2/2/2015 380.16 7.23% 2/2/2015 93.426567 5.54%

3/2/2015 49.193649 3.31% 3/2/2015 372.10001 -2.12% 3/2/2015 90.859901 -2.75%

4/1/2015 48.46307 -1.49% 4/1/2015 421.78 13.35% 4/1/2015 90.384789 -0.52%

5/1/2015 49.986767 3.14% 5/1/2015 429.23001 1.77% 5/1/2015 91.629578 1.38%

6/1/2015 53.108791 6.25% 6/1/2015 434.09 1.13% 6/1/2015 89.347336 -2.49%

7/1/2015 56.648724 6.67% 7/1/2015 536.15002 23.51% 7/1/2015 92.228584 3.22%

8/3/2015 54.942673 -3.01% 8/3/2015 512.89002 -4.34% 8/3/2015 88.95488 -3.55%

9/1/2015 60.612377 10.32% 9/1/2015 511.89002 -0.19% 9/1/2015 90.966476 2.26%

10/1/2015 64.585182 6.55% 10/1/2015 625.90002 22.27% 10/1/2015 98.577568 8.37%

11/2/2015 65.201309 0.95% 11/2/2015 664.79999 6.22% 11/2/2015 96.619324 -1.99%

12/1/2015 61.762321 -5.27% 12/1/2015 675.89002 1.67% 12/1/2015 97.063004 0.46%

1/4/2016 61.278103 -0.78% 1/4/2016 587 -13.15% 1/4/2016 96.460739 -0.62%

2/1/2016 60.863064 -0.68% 2/1/2016 552.52002 -5.87% 2/1/2016 95.023048 -1.49%

3/1/2016 60.901089 0.06% 3/1/2016 593.64002 7.44% 3/1/2016 100.26112 5.51%

4/1/2016 58.394501 -4.12% 4/1/2016 659.59003 11.11% 4/1/2016 100.73072 0.47%

5/2/2016 54.708935 -6.31% 5/2/2016 722.78998 9.58% 5/2/2016 98.979477 -1.74%

6/1/2016 54.848885 0.26% 6/1/2016 715.62 -0.99% 6/1/2016 104.42342 5.50%

7/1/2016 55.146973 0.54% 7/1/2016 758.81 6.04% 7/1/2016 107.36076 2.81%

8/1/2016 57.273361 3.86% 8/1/2016 769.15997 1.36% 8/1/2016 105.96609 -1.30%

9/1/2016 52.460724 -8.40% 9/1/2016 837.31 8.86% 9/1/2016 107.97125 1.89%

10/3/2016 49.999603 -4.69% 10/3/2016 789.82001 -5.67% 10/3/2016 106.41277 -1.44%

11/1/2016 49.889999 -0.22% 11/1/2016 750.57001 -4.97% 11/1/2016 100.1 -5.93%

12/1/2016 50.830002 1.88% 12/1/2016 749.87 -0.09% 12/1/2016 104.63 4.53%

1/3/2017 52.900002 4.07% 1/3/2017 823.47998 9.82% 1/3/2017 103.78 -0.81%

2/1/2017 52.810001 -0.17% 2/1/2017 812.5 -1.33% 2/1/2017 105.61 1.76%

Average Monthly Returns 1.61% Average Monthly Returns 2.69% Average Monthly Returns 0.97%

Standard Deviation on Returns 5.22% Standard Deviation on Returns 8.25% Standard Deviation on Returns 3.22%

Beta 0.43 Beta 1.37 Beta 0.63

Stock Investment $ 100,000 Stock Investment $ 80,000 Stock Investment $ 120,000

Stock Value 2/8/17 $ 53.88 Stock Value 2/8/17 $ 819.71 Stock Value 2/8/17 $ 105.61

Weighted Portfolio 33.33% Weighted Portfolio 26.67% Weighted Portfolio 40.00%

Allocate the $300,000 to the individual stocks selected; basically pretend you are buying the stocks.

Now calculate the weight each stock plays in your "portfolio." Using the expected return and beta coefficients for each stock and the percentage of the $300,000 invested in each, calculate the "portfolio" expected return and the "portfolio" beta. Use Equation 7-4 for both these values, keeping the same weights, but changing the variables.

Equation 7-4. The Expected Rate of Return, E(R_p), of a portfolio comprised of Two Assets, A and B:

E(R_p) =

(w_a E(R_a)) + (w_b E(R_b))

where: E(R_p) =

the expected rate of return of the portfolio composed of Asset A and Asset B

w_a =

the weight of Asset A in the portfolio

E(R_a) =

the expected rate of return of Asset A

w_b =

the weight of Asset B in the portfolio

E(R_b) =

the expected rate of return of Asset B

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Nike	Date	Adj Close	Return		Amazon	Date	Adj Close	Return		Pepisco	Date	Adj Close	Return
	2/7/2013	26.048929				2/7/2013	264.26999				2/7/2013	68.095627
	3/1/2013	28.225252	8.35%			3/1/2013	266.48999	0.84%			3/1/2013	71.097336	4.41%
	4/1/2013	30.42071	7.78%			4/1/2013	253.81	-4.76%			4/1/2013	74.11702	4.25%
	5/1/2013	29.591532	-2.73%			5/1/2013	269.20001	6.06%			5/1/2013	72.589203	-2.06%
	6/3/2013	30.560961	3.28%			6/3/2013	277.69	3.15%			6/3/2013	74.02095	1.97%
	7/1/2013	30.196224	-1.19%			7/1/2013	301.22	8.47%			7/1/2013	75.604721	2.14%
	8/1/2013	30.248472	0.17%			8/1/2013	280.98001	-6.72%			8/1/2013	72.156624	-4.56%
	9/3/2013	34.976902	15.63%			9/3/2013	312.64002	11.27%			9/3/2013	72.461662	0.42%
	10/1/2013	36.479214	4.30%			10/1/2013	364.03	16.44%			10/1/2013	76.645302	5.77%
	11/1/2013	38.10672	4.46%			11/1/2013	393.62	8.13%			11/1/2013	76.982544	0.44%
	12/2/2013	37.984604	-0.32%			12/2/2013	398.79001	1.31%			12/2/2013	76.113014	-1.13%
	1/2/2014	35.187923	-7.36%			1/2/2014	358.69	-10.06%			1/2/2014	73.745377	-3.11%
	2/3/2014	37.936481	7.81%			2/3/2014	362.10001	0.95%			2/3/2014	73.479248	-0.36%
	3/3/2014	35.785294	-5.67%			3/3/2014	336.37	-7.11%			3/3/2014	77.169052	5.02%
	4/1/2014	35.344395	-1.23%			4/1/2014	304.13001	-9.58%			4/1/2014	79.377846	2.86%
	5/1/2014	37.38065	5.76%			5/1/2014	312.54999	2.77%			5/1/2014	81.632843	2.84%
	6/2/2014	37.691711	0.83%			6/2/2014	324.78	3.91%			6/2/2014	83.183868	1.90%
	7/1/2014	37.487576	-0.54%			7/1/2014	312.98999	-3.63%			7/1/2014	82.02932	-1.39%
	8/1/2014	38.293026	2.15%			8/1/2014	339.04001	8.32%			8/1/2014	86.116814	4.98%
	9/2/2014	43.484882	13.56%			9/2/2014	322.44	-4.90%			9/2/2014	87.293739	1.37%
	10/1/2014	45.322754	4.23%			10/1/2014	305.45999	-5.27%			10/1/2014	90.181961	3.31%
	11/3/2014	48.403748	6.80%			11/3/2014	338.64002	10.86%			11/3/2014	93.867264	4.09%
	12/1/2014	47.007778	-2.88%			12/1/2014	310.35001	-8.35%			12/1/2014	89.254555	-4.91%
	1/2/2015	45.101063	-4.06%			1/2/2015	354.53	14.24%			1/2/2015	88.518318	-0.82%
	2/2/2015	47.619724	5.58%			2/2/2015	380.16	7.23%			2/2/2015	93.426567	5.54%
	3/2/2015	49.193649	3.31%			3/2/2015	372.10001	-2.12%			3/2/2015	90.859901	-2.75%
	4/1/2015	48.46307	-1.49%			4/1/2015	421.78	13.35%			4/1/2015	90.384789	-0.52%
	5/1/2015	49.986767	3.14%			5/1/2015	429.23001	1.77%			5/1/2015	91.629578	1.38%
	6/1/2015	53.108791	6.25%			6/1/2015	434.09	1.13%			6/1/2015	89.347336	-2.49%
	7/1/2015	56.648724	6.67%			7/1/2015	536.15002	23.51%			7/1/2015	92.228584	3.22%
	8/3/2015	54.942673	-3.01%			8/3/2015	512.89002	-4.34%			8/3/2015	88.95488	-3.55%
	9/1/2015	60.612377	10.32%			9/1/2015	511.89002	-0.19%			9/1/2015	90.966476	2.26%
	10/1/2015	64.585182	6.55%			10/1/2015	625.90002	22.27%			10/1/2015	98.577568	8.37%
	11/2/2015	65.201309	0.95%			11/2/2015	664.79999	6.22%			11/2/2015	96.619324	-1.99%
	12/1/2015	61.762321	-5.27%			12/1/2015	675.89002	1.67%			12/1/2015	97.063004	0.46%
	1/4/2016	61.278103	-0.78%			1/4/2016	587	-13.15%			1/4/2016	96.460739	-0.62%
	2/1/2016	60.863064	-0.68%			2/1/2016	552.52002	-5.87%			2/1/2016	95.023048	-1.49%
	3/1/2016	60.901089	0.06%			3/1/2016	593.64002	7.44%			3/1/2016	100.26112	5.51%
	4/1/2016	58.394501	-4.12%			4/1/2016	659.59003	11.11%			4/1/2016	100.73072	0.47%
	5/2/2016	54.708935	-6.31%			5/2/2016	722.78998	9.58%			5/2/2016	98.979477	-1.74%
	6/1/2016	54.848885	0.26%			6/1/2016	715.62	-0.99%			6/1/2016	104.42342	5.50%
	7/1/2016	55.146973	0.54%			7/1/2016	758.81	6.04%			7/1/2016	107.36076	2.81%
	8/1/2016	57.273361	3.86%			8/1/2016	769.15997	1.36%			8/1/2016	105.96609	-1.30%
	9/1/2016	52.460724	-8.40%			9/1/2016	837.31	8.86%			9/1/2016	107.97125	1.89%
	10/3/2016	49.999603	-4.69%			10/3/2016	789.82001	-5.67%			10/3/2016	106.41277	-1.44%
	11/1/2016	49.889999	-0.22%			11/1/2016	750.57001	-4.97%			11/1/2016	100.1	-5.93%
	12/1/2016	50.830002	1.88%			12/1/2016	749.87	-0.09%			12/1/2016	104.63	4.53%
	1/3/2017	52.900002	4.07%			1/3/2017	823.47998	9.82%			1/3/2017	103.78	-0.81%
	2/1/2017	52.810001	-0.17%			2/1/2017	812.5	-1.33%			2/1/2017	105.61	1.76%

	Average Monthly Returns			1.61%		Average Monthly Returns			2.69%		Average Monthly Returns			0.97%
	Standard Deviation on Returns			5.22%		Standard Deviation on Returns			8.25%		Standard Deviation on Returns			3.22%
	Beta			0.43		Beta			1.37		Beta			0.63
	Stock Investment			$ 100,000		Stock Investment			$ 80,000		Stock Investment			$ 120,000
	Stock Value 2/8/17			$ 53.88		Stock Value 2/8/17			$ 819.71		Stock Value 2/8/17			$ 105.61
	Weighted Portfolio			33.33%		Weighted Portfolio			26.67%		Weighted Portfolio			40.00%

E(R_p) =	(w_a E(R_a)) + (w_b E(R_b))
where: E(R_p) =	the expected rate of return of the portfolio composed of Asset A and Asset B
w_a =	the weight of Asset A in the portfolio
E(R_a) =	the expected rate of return of Asset A
w_b =	the weight of Asset B in the portfolio
E(R_b) =	the expected rate of return of Asset B