Task 1) use the given data of three stocks historical prices (using the data in the worksheet Daily prices) in the past 12 months (i.e., from 1 Feb 2021 to 1 Feb 2022),

calculate:

The beta

Interpret beta coefficient based on the results you obtained in question (a) and evaluate three given stocks in terms of risk and return.

The expected return of three stocks during the period

Re-calculate the beta of three stocks using the data in the worksheet Weekly prices and compare it to the beta of using Daily prices. You are required to explain why such a disparity exists and recommend which frequency you prefer to use

(Assumption: risk-free rate=current 1-year treasury rate; market rate=1-Year return of FTSET 100).

Given three stocks, you have two options to create a portfolio with different weights listed below

Port Stock X sTOCK Y Stock Z

A : 40 60 0

B 20 40 40

With these given weights

Calculate the expected return of Portfolio A and Portfolio B

Calculate the variances of Portfolio A and Portfolio B

With the results of Port a & B, which Portfolio is more profitable?

And provide reasons to justify your answer.