Using the data provided of MTN, Multichoice and Mr Price daily stock market returns compute 1.1

Expected return for each company

1.2 Variance for each share

1.3 Standard deviation for each share

Calculations are recommended to be done using Microsoft excel. Your answers for expected return and variance must not be rounded off. Round off only the standard deviation to four decimal places

1.4 Which counter you would invest in a) based on expected returns (2) b) risk (2)

1.5 If R10 000 000 is invested in the three shares what will be the expected return in Rand Value

(2) QUESTION TWO [10 Marks] Consider a portfolio investment consisting of 30% invested in MTN, 60% invested in Multichoice and 30% invested in Mr Price 2.1 Calculate the expected return of the portfolio (5) 2.2 If R10 000 000 is invested in MTN and Multichoice shares what will be the expected return in Rand Value (5) QUESTION THREE [25 Marks] Consider a portfolio investment consisting of 40% invested in MTN, 60% invested in Multichoice 3.1 Calculate the expected return of the portfolio (5) 3.2 Calculate the covariance of the portfolio (5) 3.3 Calculate the variance of the portfolio and standard deviation of the portfolio (8) 3.4 Given that the risk free rate is 0.0002. Calculate the Sharpe ratio for the portfolio (5) 3.5 Interpret the Sharpe ratio calculated in 3.4

Information

MULTICHOICE	2018/03/08	0.0103	0.003255932	4.96189E-05	8.40998E-07	0.00091706
MULTICHOICE	2018/03/09	-0.071	0.003255932	0.005513943	9.34567E-05	0.009667299
MULTICHOICE	2018/03/12	-0.0118	0.003255932	0.000226681	3.84205E-06	0.001960115
MULTICHOICE	2018/03/13	-0.0167	0.003255932	0.000398239	6.74982E-06	0.002598041
MULTICHOICE	2018/03/14	-0.007	0.003255932	0.000105184	1.78278E-06	0.001335209
MULTICHOICE	2018/03/15	0.0232	0.003255932	0.000397766	6.74179E-06	0.002596496
MULTICHOICE	2018/03/16	-0.0214	0.003255932	0.000607915	1.03036E-05	0.003209929
MULTICHOICE	2018/03/19	-0.0157	0.003255932	0.000359327	6.09029E-06	0.002467852
MULTICHOICE	2018/03/20	0.0044	0.003255932	1.30889E-06	2.21846E-08	0.000148945
MULTICHOICE	2018/03/21	-0.0128	0.003255932	0.000257793	4.36937E-06	0.002090304
MULTICHOICE	2018/03/22	-0.0049	0.003255932	6.65192E-05	1.12744E-06	0.001061812
MULTICHOICE	2018/03/23	-0.0774	0.003255932	0.006505379	0.000110261	0.010500508
MULTICHOICE	2018/03/26	0.0229	0.003255932	0.000385889	6.5405E-06	0.00255744
MULTICHOICE	2018/03/27	0.0305	0.003255932	0.000742239	1.25803E-05	0.003546876
MULTICHOICE	2018/03/28	-0.0116	0.003255932	0.000220699	3.74066E-06	0.001934078
MULTICHOICE	2018/03/29	0.0154	0.003255932	0.000147478	2.49963E-06	0.001581023
MULTICHOICE	2018/03/30	0.006	0.003255932	7.52991E-06	1.27626E-07	0.000357247
		0.1921	0.003255932	0.072341025	0.001226119	0.035015983