Questions

1. Calculate monthly returns for Chevron and Coca Cola for this period.

2. Calculate the average return, variance, and standard deviation of returns for each firm. (Use Excels AVERAGE, VAR and STDEV functions.)

3. Which stock is riskier if held on its own? Why?

4. Assume that you held an equally weighted portfolio of Chevron and Coca Cola (i.e., a portfolio with equal dollar investments in each stock). Compute the portfolios rate of return for each month, and calculate the variance and standard deviation of the portfolios monthly rate of return.

5. Is the portfolio standard deviation more or less than the average of the standard deviations of the two component stock?

6. What are the betas provided by finance.yahoo.com for each firm? Which stock has more systematic risk?

K L M N CVX Date 1.06.2017 45.45 Open High Low 1.03.2017 42.01 42.7 41.74 42.44 35.7842 1.04.2017 42.58 43.79 42.27 43.15 36.704 1.05.2017 43.15 45.7 43.1 45.47 38.6774 46.06 44.65 44.85 38.1501 1.07.2017 45.11 46.43 44.15 45.84 39.3131 1.08.2017 45.97 46.34 45.25 45.55 39.0643 1.09.2017 45.64 46.98 44.38 45.01 38.6012 1.10.2017 45.05 46.79 44.75 45.98 39.7469 1.11.2017 45.75 47.48 45.03 45.77 39.5654 1.12.2017 45.8 46.48 44.92 45.88 39.9856 1.01.2018 45.91 48.62 45.34 47.59 41.4759 43.22 37.6673 43.43 37.8504 43.21 37.9911 1.02.2018 47.41 47.73 42.19 1.03.2018 43.1 45.09 42.25 1.04.2018 43.44 45.03 41.91 1.05.2018 42.96 43.28 41.45 43 37.8064 1.06.2018 43.1 44.52 42.96 43.86 38.5625 1.07.2018 43.78 46.67 43.58 46.63 41.3631 1.08.2018 46.45 46.87 44.39 44.57 39.5358 1.09.2018 44.6 46.69 44.51 46.19 40.9728 1.10.2018 46.17 48.08 44.25 47.88 42.8332 1.11.2018 47.81 50.84 47.3 50.4 45.0876 1.12.2018 49.87 50.51 45.66 47.35 42.694 1.01.2019 46.94 48.78 46.34 48.13 43.3973 1.02.2019 48.48 49.94 44.42 45.34 40.8817 1.03.2019 45.47 46.92 44.61 46.86 42.2522 1.04.2019 46.99 49.18 46.04 49.06 44.6221 1.05.2019 48.95 49.9 47.07 49.13 44.6857 1.06.2019 49.16 52.2 49.02 50.92 46.3138 1.07.2019 51.07 54.82 50.78 52.63 48.2428 1.08.2019 52.78 55.34 51.4 55.04 50.4519 1.09.2019 54.98 55.92 53.63 54.44 49.9019 1.10.2019 54.53 55.39 52.82 54.43 50.2575 1.11.2019 54.63 54.74 51.58 53.4 49.3065 1.12.2019 53.32 55.45 52.85 55.35 51.4887 1.01.2020 55.32 59.08 54.09 58.4 54.326 1.02.2020 58.75 60.13 51.58 53.49 49.7585 1.03.2020 53.93 59 36.27 44.25 41.1631 1.04.2020 42.48 49.73 41.8 45.89 43.0631 1.05.2020 45.62 47.46 43.2 46.68 43.8044 1.06.2020 46.66 49.97 43.51 44.68 41.9276 1.07.2020 44.93 49.28 43.83 47.24 44.7326 1.08.2020 47.14 50.07 46.22 49.53 46.9011 1.09.2020 49.31 52.14 47.56 49.37 46.7496 1.10.2020 49.44 51.53 47.3 48.06 45.8775 1.11.2020 48.75 54.62 48.24 51.6 49.2567 1.12.2020 52.14 54.93 51.64 54.84 52.7601 1.01.2021 54.27 54.63 48.11 48.15 46.3238 1.02.2021 48.27 51.51 48.18 48.99 47.1319 1.03.2021 49.44 53.94 49.4 52.71 50.7109 1.04.2021 52.96 54.87 52.29 53.98 52.3649 1.05.2021 54.27 55.71 53.61 55.29 53.6358 1.06.2021 55.34 56.48 53.72 54.11 52.4911 1.07.2021 54.34 57.56 53.55 57.03 55.7406 1.08.2021 57.2 57.56 55.45 56.31 55.0368 1.09.2021 56.38 57.03 52.43 52.47 51.2837 1.10.2021 52.78 56.47 52.4 56.37 55.5113 1.11.2021 56.39 57.16 52.44 52.45 51.651 1.12.2021 52.98 59.35 52.28 59.21 58.7602 58.38 61.01 60.5465 59.22 62.24 61.7672 1.01.2022 58.82 61.45 1.02.2022 60.91 62.9 c P R Close Adj Close Volume 339185400 232465400 250453800 241609300 195369200 208673800 197449400 192361800 217681900 207945400 256417300 292809500 278776900 256838800 252954800 259306900 207676200 231152100 193542300 326355300 279957400 308108600 290752700 388570200 363961200 238015200 258269900 248586800 257685900 271904100 216515600 245853900 226002600 230590700 286856700 245599100 693439800 395209600 382765600 399229500 369294100 252126200 341638700 292193800 339327300 303487100 457208200 301062400 452188000 270807700 309903200 305857700 293385300 220335000 334494700 331812000 286683400 426786000 407891700 396000700 S T U V W X Y Z AA AB KO Date Open High Low Close Adj Close Volume 1.03.2017 112.92 114.39 105.82 107.37 85.1424 164742200 1.04.2017 107.22 110.67 103.83 106.7 84.6111 101522600 1.05.2017 106.26 107.71 103.07 103.48 82.0577 118545200 1.06.2017 103.69 108.49 102.55 104.33 83.5733 126624600 1.07.2017 104.24 110 102.55 109.19 87.4664 105290000 1.08.2017 109.54 111.44 105.3 107.62 86.2088 109283200 1.09.2017 107,68 118.33 107.51 117.5 95.0688 109354600 1.10.2017 116.42 120.89 112.57 115.89 93.7662 113304800 1.11.2017 116.3 119.15 113.9 118.99 96.2744 101837000 1.12.2017 119.81 126.2 118.52 125.19 102.239 105261400 1.01.2018 125.71 133.88 124.05 125.35 102.37 130293100 1.02.2018 125.6 125.63 108.02 111.92 914018 170301700 1.03.2018 111.53 118.35 109.83 114.04 94.0602 144392700 1.04.2018 113.89 127.9 110.54 125.11 103.191 143076700 1.05.2018 124.03 131.08 120.06 124.3 102.523 147855000 1.06.2018 125.49 128.38 121.55 126.43 105.189 136009000 1.07.2018 125.28 128.55 119.67 126.27 105.056 105554900 1.08.2018 125.31 125.92 117.09 118.46 98.5578 113551900 1.09.2018 118.93 124.24 113.39 122.28 102.711 112659000 1.10.2018 123.11 127.6 107.54 111.65 93.7826 152330900 1.11.2018 111.77 121.87 110.1 118.94 99.9059 151564000 1.12.2018 120.77 122.43 100.22 108.79 92.2733 169674800 1.01.2019 107.34 115.41 107.1 114.65 97.2437 139155300 1.02.2019 116.65 121.29 115.92 119.58 101.425 113779300 1.03.2019 120.39 126.92 119.2 123.18 105.529 126230200 1.04.2019 123.87 127.34 115.65 120.06 102.856 221265300 1.05.2019 119.8 122.49 113.72 113.85 97.5358 174977300 1.06.2019 114.7 126.2 114.47 124.44 107.657 112770200 1.07.2019 125.36 127 122.33 123.11 106.507 99523800 1.08.2019 122 123.89 114.35 117.72 101.844 132460500 1.09.2019 115.77 125.27 114.55 118.6 103.66 122911200 1.10.2019 119.27 119.51 110.42 116.14 101.509 110432200 1.11.2019 115.49 122.94 114.02 117.13 102.375 119652400 1.12.2019 117.98 121.42 115.7 120.51 106.367 119639200 1.01.2020 120.81 122.72 106.4 107.14 94.5659 154388100 1.02.2020 106.95 112.6 90.11 93.34 82.3855 158458200 1.03.2020 94.02 99.02 51.6 72.46 64.7035 475985200 1.04.2020 69.51 95.74 67.61 92 82.1519 302922300 1.05.2020 91.51 95.56 86.02 91.7 81.884 206892500 1.06.2020 90.94 103.59 86.18 89.23 80.8482 206216100 1.07.2020 89.28 92.74 81.51 83.94 76.0551 181475800 1.08.2020 83.98 93.01 83.51 83.93 76.046 173478400 1.09.2020 83.26 84.49 70.5 72 66.1771 256426900 1.10.2020 71.51 76.09 65.16 69.5 63.8793 251160800 1.11.2020 70.7 95.82 69.4 87.18 80.1295 241627400 1.12.2020 89.28 94.56 83.53 84.45 78.7624 224789100 1.01.2021 85.15 96.32 83.89 85.2 79.4619 197547100 1.02.2021 85.99 104.96 84.57 100 93.2651 203334500 1.03.2021 102.46 112.7 100.69 104.79 99.114 304177300 1.04.2021 105.26 107.65 100.14 103.07 97.4872 175170000 1.05.2021 103.98 113.11 101.97 103.79 98.1682 209434500 1.06.2021 105.3 110.51 96.31 104.74 100.279 224064300 1.07.2021 106.95 107.1 94.52 101.81 97.4742 205695700 1.08.2021 102.08 103.98 92.86 96.77 92.6488 213430100 1.09.2021 96.86 104.89 93.31 101.45 98.439 250488400 1.10.2021 102.22 115.29 101.88 114.49 111.092 211811800 1.11.2021 115.03 118.08 111.1 112.87 109.52 225299300 1.12.2021 114.95 119.34 110.73 117.35 115.183 221103300 1.01.2022 117.42 137 117.29 131.33 128.905 300811900 1.02.2022 130.83 144 130.51 282878000 144 141.341 K L M N CVX Date 1.06.2017 45.45 Open High Low 1.03.2017 42.01 42.7 41.74 42.44 35.7842 1.04.2017 42.58 43.79 42.27 43.15 36.704 1.05.2017 43.15 45.7 43.1 45.47 38.6774 46.06 44.65 44.85 38.1501 1.07.2017 45.11 46.43 44.15 45.84 39.3131 1.08.2017 45.97 46.34 45.25 45.55 39.0643 1.09.2017 45.64 46.98 44.38 45.01 38.6012 1.10.2017 45.05 46.79 44.75 45.98 39.7469 1.11.2017 45.75 47.48 45.03 45.77 39.5654 1.12.2017 45.8 46.48 44.92 45.88 39.9856 1.01.2018 45.91 48.62 45.34 47.59 41.4759 43.22 37.6673 43.43 37.8504 43.21 37.9911 1.02.2018 47.41 47.73 42.19 1.03.2018 43.1 45.09 42.25 1.04.2018 43.44 45.03 41.91 1.05.2018 42.96 43.28 41.45 43 37.8064 1.06.2018 43.1 44.52 42.96 43.86 38.5625 1.07.2018 43.78 46.67 43.58 46.63 41.3631 1.08.2018 46.45 46.87 44.39 44.57 39.5358 1.09.2018 44.6 46.69 44.51 46.19 40.9728 1.10.2018 46.17 48.08 44.25 47.88 42.8332 1.11.2018 47.81 50.84 47.3 50.4 45.0876 1.12.2018 49.87 50.51 45.66 47.35 42.694 1.01.2019 46.94 48.78 46.34 48.13 43.3973 1.02.2019 48.48 49.94 44.42 45.34 40.8817 1.03.2019 45.47 46.92 44.61 46.86 42.2522 1.04.2019 46.99 49.18 46.04 49.06 44.6221 1.05.2019 48.95 49.9 47.07 49.13 44.6857 1.06.2019 49.16 52.2 49.02 50.92 46.3138 1.07.2019 51.07 54.82 50.78 52.63 48.2428 1.08.2019 52.78 55.34 51.4 55.04 50.4519 1.09.2019 54.98 55.92 53.63 54.44 49.9019 1.10.2019 54.53 55.39 52.82 54.43 50.2575 1.11.2019 54.63 54.74 51.58 53.4 49.3065 1.12.2019 53.32 55.45 52.85 55.35 51.4887 1.01.2020 55.32 59.08 54.09 58.4 54.326 1.02.2020 58.75 60.13 51.58 53.49 49.7585 1.03.2020 53.93 59 36.27 44.25 41.1631 1.04.2020 42.48 49.73 41.8 45.89 43.0631 1.05.2020 45.62 47.46 43.2 46.68 43.8044 1.06.2020 46.66 49.97 43.51 44.68 41.9276 1.07.2020 44.93 49.28 43.83 47.24 44.7326 1.08.2020 47.14 50.07 46.22 49.53 46.9011 1.09.2020 49.31 52.14 47.56 49.37 46.7496 1.10.2020 49.44 51.53 47.3 48.06 45.8775 1.11.2020 48.75 54.62 48.24 51.6 49.2567 1.12.2020 52.14 54.93 51.64 54.84 52.7601 1.01.2021 54.27 54.63 48.11 48.15 46.3238 1.02.2021 48.27 51.51 48.18 48.99 47.1319 1.03.2021 49.44 53.94 49.4 52.71 50.7109 1.04.2021 52.96 54.87 52.29 53.98 52.3649 1.05.2021 54.27 55.71 53.61 55.29 53.6358 1.06.2021 55.34 56.48 53.72 54.11 52.4911 1.07.2021 54.34 57.56 53.55 57.03 55.7406 1.08.2021 57.2 57.56 55.45 56.31 55.0368 1.09.2021 56.38 57.03 52.43 52.47 51.2837 1.10.2021 52.78 56.47 52.4 56.37 55.5113 1.11.2021 56.39 57.16 52.44 52.45 51.651 1.12.2021 52.98 59.35 52.28 59.21 58.7602 58.38 61.01 60.5465 59.22 62.24 61.7672 1.01.2022 58.82 61.45 1.02.2022 60.91 62.9 c P R Close Adj Close Volume 339185400 232465400 250453800 241609300 195369200 208673800 197449400 192361800 217681900 207945400 256417300 292809500 278776900 256838800 252954800 259306900 207676200 231152100 193542300 326355300 279957400 308108600 290752700 388570200 363961200 238015200 258269900 248586800 257685900 271904100 216515600 245853900 226002600 230590700 286856700 245599100 693439800 395209600 382765600 399229500 369294100 252126200 341638700 292193800 339327300 303487100 457208200 301062400 452188000 270807700 309903200 305857700 293385300 220335000 334494700 331812000 286683400 426786000 407891700 396000700 S T U V W X Y Z AA AB KO Date Open High Low Close Adj Close Volume 1.03.2017 112.92 114.39 105.82 107.37 85.1424 164742200 1.04.2017 107.22 110.67 103.83 106.7 84.6111 101522600 1.05.2017 106.26 107.71 103.07 103.48 82.0577 118545200 1.06.2017 103.69 108.49 102.55 104.33 83.5733 126624600 1.07.2017 104.24 110 102.55 109.19 87.4664 105290000 1.08.2017 109.54 111.44 105.3 107.62 86.2088 109283200 1.09.2017 107,68 118.33 107.51 117.5 95.0688 109354600 1.10.2017 116.42 120.89 112.57 115.89 93.7662 113304800 1.11.2017 116.3 119.15 113.9 118.99 96.2744 101837000 1.12.2017 119.81 126.2 118.52 125.19 102.239 105261400 1.01.2018 125.71 133.88 124.05 125.35 102.37 130293100 1.02.2018 125.6 125.63 108.02 111.92 914018 170301700 1.03.2018 111.53 118.35 109.83 114.04 94.0602 144392700 1.04.2018 113.89 127.9 110.54 125.11 103.191 143076700 1.05.2018 124.03 131.08 120.06 124.3 102.523 147855000 1.06.2018 125.49 128.38 121.55 126.43 105.189 136009000 1.07.2018 125.28 128.55 119.67 126.27 105.056 105554900 1.08.2018 125.31 125.92 117.09 118.46 98.5578 113551900 1.09.2018 118.93 124.24 113.39 122.28 102.711 112659000 1.10.2018 123.11 127.6 107.54 111.65 93.7826 152330900 1.11.2018 111.77 121.87 110.1 118.94 99.9059 151564000 1.12.2018 120.77 122.43 100.22 108.79 92.2733 169674800 1.01.2019 107.34 115.41 107.1 114.65 97.2437 139155300 1.02.2019 116.65 121.29 115.92 119.58 101.425 113779300 1.03.2019 120.39 126.92 119.2 123.18 105.529 126230200 1.04.2019 123.87 127.34 115.65 120.06 102.856 221265300 1.05.2019 119.8 122.49 113.72 113.85 97.5358 174977300 1.06.2019 114.7 126.2 114.47 124.44 107.657 112770200 1.07.2019 125.36 127 122.33 123.11 106.507 99523800 1.08.2019 122 123.89 114.35 117.72 101.844 132460500 1.09.2019 115.77 125.27 114.55 118.6 103.66 122911200 1.10.2019 119.27 119.51 110.42 116.14 101.509 110432200 1.11.2019 115.49 122.94 114.02 117.13 102.375 119652400 1.12.2019 117.98 121.42 115.7 120.51 106.367 119639200 1.01.2020 120.81 122.72 106.4 107.14 94.5659 154388100 1.02.2020 106.95 112.6 90.11 93.34 82.3855 158458200 1.03.2020 94.02 99.02 51.6 72.46 64.7035 475985200 1.04.2020 69.51 95.74 67.61 92 82.1519 302922300 1.05.2020 91.51 95.56 86.02 91.7 81.884 206892500 1.06.2020 90.94 103.59 86.18 89.23 80.8482 206216100 1.07.2020 89.28 92.74 81.51 83.94 76.0551 181475800 1.08.2020 83.98 93.01 83.51 83.93 76.046 173478400 1.09.2020 83.26 84.49 70.5 72 66.1771 256426900 1.10.2020 71.51 76.09 65.16 69.5 63.8793 251160800 1.11.2020 70.7 95.82 69.4 87.18 80.1295 241627400 1.12.2020 89.28 94.56 83.53 84.45 78.7624 224789100 1.01.2021 85.15 96.32 83.89 85.2 79.4619 197547100 1.02.2021 85.99 104.96 84.57 100 93.2651 203334500 1.03.2021 102.46 112.7 100.69 104.79 99.114 304177300 1.04.2021 105.26 107.65 100.14 103.07 97.4872 175170000 1.05.2021 103.98 113.11 101.97 103.79 98.1682 209434500 1.06.2021 105.3 110.51 96.31 104.74 100.279 224064300 1.07.2021 106.95 107.1 94.52 101.81 97.4742 205695700 1.08.2021 102.08 103.98 92.86 96.77 92.6488 213430100 1.09.2021 96.86 104.89 93.31 101.45 98.439 250488400 1.10.2021 102.22 115.29 101.88 114.49 111.092 211811800 1.11.2021 115.03 118.08 111.1 112.87 109.52 225299300 1.12.2021 114.95 119.34 110.73 117.35 115.183 221103300 1.01.2022 117.42 137 117.29 131.33 128.905 300811900 1.02.2022 130.83 144 130.51 282878000 144 141.341