Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

QUESTION 4 The table below shows historical return for the two types of security assets in 5 years period. These two assets are grouped under

image text in transcribed

QUESTION 4 The table below shows historical return for the two types of security assets in 5 years period. These two assets are grouped under one portfolio. Years Return for Stock T (%) Return for Stock M (%) 2016 12 20 2017 10 -15 2018 -4 19 2019 1 14 2020 8 21 Based on the table above : (**for questions a,b,c,d and f show calculation manually **) a) Calculate the average rate of return for each stock during 5 years period. b) Calculate the average rate of return for each year. c) Calculate the average rate of return for the portfolio. d) Calculate the standard deviation for each stock and portfolio. e) Calculate the correlation. (Shows the calculation in Excel format) f) Calculate beta for each stock. g) If you are a portfolio manager and this is the portfolio that the client want to invest the funds into, explain the areas you use to discuss further about this portfolio. QUESTION 4 The table below shows historical return for the two types of security assets in 5 years period. These two assets are grouped under one portfolio. Years Return for Stock T (%) Return for Stock M (%) 2016 12 20 2017 10 -15 2018 -4 19 2019 1 14 2020 8 21 Based on the table above : (**for questions a,b,c,d and f show calculation manually **) a) Calculate the average rate of return for each stock during 5 years period. b) Calculate the average rate of return for each year. c) Calculate the average rate of return for the portfolio. d) Calculate the standard deviation for each stock and portfolio. e) Calculate the correlation. (Shows the calculation in Excel format) f) Calculate beta for each stock. g) If you are a portfolio manager and this is the portfolio that the client want to invest the funds into, explain the areas you use to discuss further about this portfolio

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Contemporary Islamic Finance

Authors: Karen Hunt-Ahmed

1st Edition

1118180909, 978-1118180907

More Books

Students also viewed these Finance questions

Question

f. Did they change their names? For what reasons?

Answered: 1 week ago