Download the Most Recent 5-years of Monthly Stock Price History for Two Large Market: Investment Portfolio Management Assignment, NUS, Singapore

Assignment Questions:

1. Download the most recent 5-years of monthly stock price history for two large market capitalisation stocks from Yahoo Finance (click the Investing tab followed by the Historical Prices tab). Create a time series of monthly returns from this time series of monthly stock prices. Calculate the annualised mean return, standard deviation, and correlation of the stocks.

2. Use investment proportions for the two stocks ranging from zero to 100% using intervals of 10%. Tabulate and draw the investment opportunity set of the two stocks.

3. Calculate the weights on the minimum variance portfolio consisting of the two stocks, which we denote by stock X and stock Y, using the following formulae

4. Calculate the expected return and standard deviation of this minimum variance portfolio. Plot the two assets and the minimum variance portfolio on a diagram and plot the efficient frontier consisting of portfolios made up of these two assets.

5. Discuss diversification referring to the expected return and standard deviation of the minimum-variance portfolio in your answer.

6. Write 2,500 words (+-10%) word report. Include in your report an introduction, a method section, a results section, and conclusions.