Open in new image to view
The following table contains annual returns for the stocks of ABC Corp. (ABC) and Company B (B). The returns are calculated using end-of-year prices (adjusted for dividends and stock splits). Use the information for ABC Corp (ABC) and Company B (B) to create an Excel spreadsheet that calculates the average returns over the 10-year period for portfolios comprised of ABC and Busing the following respective, weightings: (1.0.0.0).(0.9.0.1). (0.8.0.2).(0.7. 0.3), 06.04), (0.5, 0.5), (0. 406) (0.3 0.7), 02.08), (0.1,0.9) and (0.0, 1.0). The average annual returns over the 10-year period for ABC and Bare 1498% and 12 63% respectively. Also, calculate the portfolio Standard deviation over the 10-year period associated with each portfolio composition. The standard deviation over the 10-year period for ABC Corp. and Company B and their correlation coefficient are 25 28%, 23.34%, and 0.82835 respectively. (Hint Review Table 52) Enter the average return and standard deviation for a portfolio with 10% ABC Corp. and 90% Company B in the table below. (Round to two decimal places.) Portfolio Weights Portfolio Average Return Portfolio Standard Deviation WABC W B ABC = 14.98% = 12.63% 0.1 0.9 % Enter the average return and standard deviation for a portfolio with 100% ABC Corp. and 0% Company B in the table below. (Round to two decimal places) Portfolio Weights Portfolio Average Return Portfolio Standard Deviation WABC W ABC - 1498% 12.63% 1. 0 00 Enter the average return and standard deviation for a portfolio with 90% ABC Corp. and 10% Company B in the table below. (Round to two decimal places) Portfolio Weights Portfolio Average Return Portfolio Standard Deviation WABC W B ABC = 14.98% 8 = 12.63% % Enter the average return and standard deviation for a portfolio with 0% ABC Corp. and 100% Company B in the table below. (Round to two decimal places.) Portfolio Weights Portfolio Average Return Portfolio Standard Deviation WABC W B ABC = 14.98% = 12.63% 0.0 1.0 0.9 Year 2005 Enter the average return and standard deviation for a portfolio with 80% ABC Corp. and 20% Company B in the table below. (Round to two decimal places) Portfolio Weights Portfolio Average Return Portfolio Standard Deviation WABC w g ABC = 14.98% = 12.63% 0.8 02 Enter the average return and standard deviation for a portfolio with 70% ABC Corp. and 30% Company B in the table below. Round to two decimal places) Portfolio Weights Portfolio Average Return Portfolio Standard Deviation WABC WE ABC = 14.98% = 12.63% ABC Returns -5.4% 2.2% - 30.5% - 11.9% 29.3% 2006 2007 2008 2009 2010 2011 2012 2013 2014 B Returns 16.5% - 7.2% - 27.5% -3.2% 9.7% 8.9% 4.1% 43.6% 42.2% 39.2% 25.8% Enter the average return and standard deviation for a portfolio with 60% ABC Corp. and 40% Company B in the table below. (Round to two decimal places) Portfolio Weights Portfolio Average Return Portfolio Standard Deviation WABC w g ABC = 14.98% = 12.63% 22.6% 51.5% 35.7% 30.5% Enter the average return and standard deviation for a portfolio with 50% ABC Corp. and 50% Company B in the table below. (Round to two decimal places.) Portfolio Weights Portfolio Average Return Portfolio Standard Deviation WABC W B ABC = 14.98% = 12.63% 0.5 Enter the average return and standard deviation for a portfolio with 40% ABC Corp. and 60% Company B in the table below. (Round to two decimal places.) Portfolio Weights Portfolio Average Return Portfolio Standard Deviation WABC W B ABC = 14.98% = 12.63% 0.4 0.6 % Enter the average return and standard deviation for a portfolio with 30% ABC Corp. and 70% Company B in the table below. (Round to two decimal places) Portfolio Weights Portfolio Average Return Portfolio Standard Deviation WABC We ABC = 14.98% -12.63% 0.7 % 196 Enter the average return and standard deviation for a portfolio with 20% ABC Corp. and 80% Company B in the table below. (Round to two decimal places.) Portfolio Weights Portfolio Average Return Portfolio Standard Deviation WABC We ABC = 14.98% = 12.63% 0.2 0.8 % % The following table contains annual returns for the stocks of ABC Corp. (ABC) and Company B (B). The returns are calculated using end-of-year prices (adjusted for dividends and stock splits). Use the information for ABC Corp (ABC) and Company B (B) to create an Excel spreadsheet that calculates the average returns over the 10-year period for portfolios comprised of ABC and Busing the following respective, weightings: (1.0.0.0).(0.9.0.1). (0.8.0.2).(0.7. 0.3), 06.04), (0.5, 0.5), (0. 406) (0.3 0.7), 02.08), (0.1,0.9) and (0.0, 1.0). The average annual returns over the 10-year period for ABC and Bare 1498% and 12 63% respectively. Also, calculate the portfolio Standard deviation over the 10-year period associated with each portfolio composition. The standard deviation over the 10-year period for ABC Corp. and Company B and their correlation coefficient are 25 28%, 23.34%, and 0.82835 respectively. (Hint Review Table 52) Enter the average return and standard deviation for a portfolio with 10% ABC Corp. and 90% Company B in the table below. (Round to two decimal places.) Portfolio Weights Portfolio Average Return Portfolio Standard Deviation WABC W B ABC = 14.98% = 12.63% 0.1 0.9 % Enter the average return and standard deviation for a portfolio with 100% ABC Corp. and 0% Company B in the table below. (Round to two decimal places) Portfolio Weights Portfolio Average Return Portfolio Standard Deviation WABC W ABC - 1498% 12.63% 1. 0 00 Enter the average return and standard deviation for a portfolio with 90% ABC Corp. and 10% Company B in the table below. (Round to two decimal places) Portfolio Weights Portfolio Average Return Portfolio Standard Deviation WABC W B ABC = 14.98% 8 = 12.63% % Enter the average return and standard deviation for a portfolio with 0% ABC Corp. and 100% Company B in the table below. (Round to two decimal places.) Portfolio Weights Portfolio Average Return Portfolio Standard Deviation WABC W B ABC = 14.98% = 12.63% 0.0 1.0 0.9 Year 2005 Enter the average return and standard deviation for a portfolio with 80% ABC Corp. and 20% Company B in the table below. (Round to two decimal places) Portfolio Weights Portfolio Average Return Portfolio Standard Deviation WABC w g ABC = 14.98% = 12.63% 0.8 02 Enter the average return and standard deviation for a portfolio with 70% ABC Corp. and 30% Company B in the table below. Round to two decimal places) Portfolio Weights Portfolio Average Return Portfolio Standard Deviation WABC WE ABC = 14.98% = 12.63% ABC Returns -5.4% 2.2% - 30.5% - 11.9% 29.3% 2006 2007 2008 2009 2010 2011 2012 2013 2014 B Returns 16.5% - 7.2% - 27.5% -3.2% 9.7% 8.9% 4.1% 43.6% 42.2% 39.2% 25.8% Enter the average return and standard deviation for a portfolio with 60% ABC Corp. and 40% Company B in the table below. (Round to two decimal places) Portfolio Weights Portfolio Average Return Portfolio Standard Deviation WABC w g ABC = 14.98% = 12.63% 22.6% 51.5% 35.7% 30.5% Enter the average return and standard deviation for a portfolio with 50% ABC Corp. and 50% Company B in the table below. (Round to two decimal places.) Portfolio Weights Portfolio Average Return Portfolio Standard Deviation WABC W B ABC = 14.98% = 12.63% 0.5 Enter the average return and standard deviation for a portfolio with 40% ABC Corp. and 60% Company B in the table below. (Round to two decimal places.) Portfolio Weights Portfolio Average Return Portfolio Standard Deviation WABC W B ABC = 14.98% = 12.63% 0.4 0.6 % Enter the average return and standard deviation for a portfolio with 30% ABC Corp. and 70% Company B in the table below. (Round to two decimal places) Portfolio Weights Portfolio Average Return Portfolio Standard Deviation WABC We ABC = 14.98% -12.63% 0.7 % 196 Enter the average return and standard deviation for a portfolio with 20% ABC Corp. and 80% Company B in the table below. (Round to two decimal places.) Portfolio Weights Portfolio Average Return Portfolio Standard Deviation WABC We ABC = 14.98% = 12.63% 0.2 0.8 % %
