Portfolio analysis

4. Suppose you form a portfolio that invests 10% in T, 20% in JPM, 30% in NEM and 40% in CVX. Calculate (a) portfolio monthly returns, (b) portfolio's average monthly return, and (c) standard deviation of portfolio monthly returns. Discuss. Highlight your final answers.

Average Return E (r) of each stock: The average return on each of these stocks were calculated in excel using today's price-yesterdays price/yesterday's price and then the average taken from 114 days of adj. closing cost.

Ave. Return E(T)=0.85% StDEV(T)=4.46%

Ave. Return(JPM)=1.36% StDEV(JPM)=6.94%

Ave.Return E(NEM)=0.60% StDEV(NEM)10.30%

Ave. Return E(CVX)=0.90% StDEV(CVX)5.74%

Weight

WW(T)=10%

W(JPM)20%

W(NEM)30%

W(CVX)40%

E (r)ptf = W(T)*E(T) + W(JPM)*E(JPM) + W(NEM)*E(NEM)+ W(CVX)*E(CVX)

******I calculated in excel and got these answers: Is the E(r)ptf the portfolio monthly returns or the average monthly return? How do you calculate the (a) portfolio montly returns and (b) the average monthly return?

E(r) ptf=0.90%

StDEV(r) ptf=2.51%