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Question 5,6 and 7. Please give full workings and correct answers i really need help. Thanks in advance You are considering investing in stocks and
Question 5,6 and 7. Please give full workings and correct answers i really need help. Thanks in advance
You are considering investing in stocks and have identified the following potential stocks. They are Alibaba Group Holding Limited (BABA), Amazon (AMZN), Kogan (KGN) and China Petroleum \& Chemical (386). The table below shows the historical share prices (\$) between 2016 and 2022. Note that these prices are recorded on the 1st day of the year, for example, 1st of January 2020. Students should assume no dividend is distributed during this period and ignore the exchange rate conversion. Calculate the expected (annual) return and standard deviation if you owned a portfolio consisting of 50% in Amazon and 50\% in Alibaba. 6. (3 marks) Calculate the expected (annual) return and standard deviation if you owned a portfolio consisting of 80% in Amazon and 20% in China Petroleum. 7. (3 marks) Compare the portfolios in parts 5 or 6 . Which portfolio (parts 5 or 6 ) provides better diversification? Define diversification and explain your answer(s)Step by Step Solution
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