Question
PLEASE ANSWER BOTH PARTS: PART A: Go to Yahoo Finance and download weekly stock price data for Target and Walmart for all of 2015, 2016
PLEASE ANSWER BOTH PARTS:
PART A:
Go to Yahoo Finance and download weekly stock price data for Target and Walmart for all of 2015, 2016 and 2017.
Use the adjusted close prices to calculate weekly returns. What was the arithmetic average weekly return for Walmart?
What was the arithmetic average weekly return for a portfolio 10% invested in Target and the remainder in Walmart (assuming weekly rebalancing)?
What was the standard deviation of the portfolio?
PART B:
You have $18,000 and want to invest it in the two stocks below and the risk-free asset, Treasury bills:
A | B | C | D | |
1 | Stock A | Stock B | T-bills | |
2 | Expected return | 0.093 | 0.061 | 0.02 |
3 | Variance | 0.1156 | 0.0729 | |
4 | Standard deviation | 0.34 | 0.27 | |
5 | Covariance | 0.02754 |
What is the Sharpe ratio of the optimal risky portfolio?
What is the standard deviation of a portfolio composed of $1,800 optimal risky portfolio and $16,200 risk-free asset?
Still assuming a portfolio composed of $1,800 optimal risky portfolio and $16,200 risk-free asset, how much money should you invest in stock B (in $)?
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