# Question

a. Johnson & Johnson (JNJ) (25%), McDonald’s (MCD) (25%), Merck (MRK) (25%), Microsoft (MSFT) (25%)

b. JNJ (10%), MCD (30%), MRK (10%), MSFT (50%)

c. JNJ (10%), MCD (70%), MRK (10%), MSFT (0%)

d. Explain why the choice of which portfolio to invest in is obvious.

We have recorded the monthly returns for the following Dow Jones Industrials 30 stocks listed on the New York Stock Exchange for the period January 2008 to December 2012:

3M (MMM), Alcoa (AA), American Express (AXP), AT&T (T), Bank of America (BAC), Boeing (BA), Caterpillar (CAT), Chevron (CVX), Cisco Systems (CSCO), Coca-Cola (KO), Disney (DIS), Du Pont (DD), Exxon (XOM), General Electric (GE), Hewlett-Packard (HPQ), Home Depot (HD), Intel (INTC), International Business Machines (IBM), Johnson & Johnson (JNJ), JP Morgan Chase (JPM), McDonald’s (MCD), Merck (MRK), Microsoft (MSFT), Pfizer (PFE), Proctor & Gamble (PG), Travelers (TRV), United Technologies (UTX), United Health (UNH), Verizon Communications (VZ), Wal-Mart Stores (WMT).

b. JNJ (10%), MCD (30%), MRK (10%), MSFT (50%)

c. JNJ (10%), MCD (70%), MRK (10%), MSFT (0%)

d. Explain why the choice of which portfolio to invest in is obvious.

We have recorded the monthly returns for the following Dow Jones Industrials 30 stocks listed on the New York Stock Exchange for the period January 2008 to December 2012:

3M (MMM), Alcoa (AA), American Express (AXP), AT&T (T), Bank of America (BAC), Boeing (BA), Caterpillar (CAT), Chevron (CVX), Cisco Systems (CSCO), Coca-Cola (KO), Disney (DIS), Du Pont (DD), Exxon (XOM), General Electric (GE), Hewlett-Packard (HPQ), Home Depot (HD), Intel (INTC), International Business Machines (IBM), Johnson & Johnson (JNJ), JP Morgan Chase (JPM), McDonald’s (MCD), Merck (MRK), Microsoft (MSFT), Pfizer (PFE), Proctor & Gamble (PG), Travelers (TRV), United Technologies (UTX), United Health (UNH), Verizon Communications (VZ), Wal-Mart Stores (WMT).

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