Assignment Details:
The aim is to provide students with an opportunity to analyse various investment alternatives based on the respective risk and return so as to choose the most appropriate investment opportunity. You are expected to read beyond textbooks and be able to apply the knowledge gained from real life examples either from your working environment and/or case studies and are able to demonstrate your competence in the areas indicated in the questions. You are encouraged to provide specific in-depth comments instead of general comments.
Stuck with a lot of homework assignments and feeling stressed ? Take professional academic assistance & Get 100% Plagiarism free papers
Instructions to students:
Download stock prices for any two different companies – 5 years of monthly closing prices for each company. You can use any database to obtain the prices e.g. Bloomberg, yahoo finance (click the Investing tab followed by the Historical Prices tab) etc. Use data from December 2012 to December 2017 to generate average monthly returns. Calculate and report the annualized mean return, standard deviation and correlation of the stocks.
(5 marks)
Use investment proportions for the two stocks ranging from 0% to 100% using intervals of 5%. Tabulate the investment opportunity set of the two stocks. Plot the investment opportunity set of the two stocks.
(5 marks)
Calculate and report the weights on the optimal risky portfolio consisting of the two stocks, which we denote by stock 1 and stock 2.
(5 marks)
Calculate the expected return and standard deviation of this optimal risky portfolio. Plot the optimal risky portfolio on the diagram determined in (b) above.
(5 marks)
Calculate the weights on the minimum variance portfolio consisting of the two stocks, which we denote by stock 1 and stock 2.
(5 marks)
Calculate the expected return and standard deviation of this minimum variance portfolio (MVP). Plot the minimum variance portfolio on the same graph in (b) above. Identify the MVP and efficient frontier consisting of the portfolios made up of these two assets. Label them clearly on the graph.
(5 marks)
Discuss in your report diversification referring to the efficient frontier and comparing the expected return and standard deviation of the optimal risky portfolio to the minimum-variance portfolio in your answer.
The expected return of the portfolio is 1.39 this means that every dollar invested will make a profit of $0.39 .it is more risky to invest in the E-bay stocks than investing in the Amazon stocks.in general, investing in either of the stock will result in a loss because most of the values on the efficient frontier are negatives. The minimum variance portfolio is 0.0050904 as read from the graph.
SingaporeAssignmentHelp.com writers present an exceptional management subject writing help for all the students pursuing their degree course in the field. You can come to us anytime and get cheap assignment writing help from our experts.
Looking for Plagiarism free Answers for your college/ university Assignments.
- EGH222 Healthcare Analytics Assignment 2: Predictive Model for Sick Days Based on Employee Demographics and Lifestyle Data
- Sustainability Strategy Assignment: Selected Company Case Study on Addressing Sector Challenges and Driving Behavioural Change Campaigns
- 7WBS2012 Executive Career Development Assignment: Career Pathway & Readiness Post-MBA in Education Management
- CVE2322 Gantry Build Prototype Assignment: Sustainable Civil Engineering Model Using Recyclable Materials
- BMG706 Strategic Quality Change Assignment Report: Enhancing Operational Excellence at any Organization
- CVE2323 Structural Analysis Assignment: Matrix Method & STAAD.Pro Evaluation of Frame Systems
- BMK3015 Major Project Assignment: Customer-Centric Design Solutions Using Research & Project Management
- Wellbeing Assignment: University Students’ Perspectives for Improving Mental Health Support
- BCLO001 Business Statistics Assignment: Analysis of Exercise Duration Among Singaporean Students
- BM4364 Customer Experience Assignment: Evaluating CX Practices Through Employee Insights in the Service Industry