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You are looking to invest your money in Stock ABC and Stock XYZ . Their historical returns for the past 6 years are found in
You are looking to invest your money in Stock ABC and Stock XYZ Their historical returns
for the past years are found in the following table.
a What is the sample standard deviation and average return arithmetic mean for each
stock? What is the correlation of returns correlation coefficient
b You are thinking of investing in a portfolio containing these stocks. Calculate the
return and standard deviation of returns if you held these portfolios for the past years
with the following weightings.
c Which Portfolio would you prefer and why?
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