# Question

Refer to Exercise.

In Exercise, we calculated the returns on the following selected stocks on the NASDAQ Exchange for the period January 2008 to December 2012: Adobe Systems (ADBE), Amazon (AMZN), Amgen (AMGN), Apple (AAPL), Bed Bath & Beyond (BBBY), Cisco Systems (CSCO), Comcast (CMCSA), Costco Wholesale (COST), Dell (DELL), Dollar Tree (DLTR), Expedia (EXPE), Garmin (GRMN), Google (GOOG), Intel (INTC), Mattel (MAT), Microsoft (MSFT), Netflix (NFLX), Oracle (ORCL), Research in Motion (RIMM), ScanDisk (SNDK), Sirius XM Radio (SIRI), Staples (SPLS), Starbucks (SBUX), Whole Foods Market (WFM), Wynn Resorts (WYNN), Yahoo (YHOO)

a. Compute the expected value and variance of the portfolio described next. AMZN (20.4%), AAPL (8.3%), DELL (9.4%), DLTR (62%)

b. Can you do better? That is, can you find a portfolio whose expected value is greater than or equal to 2% and whose variance is less than the one you calculated in part (a)?

In Exercise, we calculated the returns on the following selected stocks on the NASDAQ Exchange for the period January 2008 to December 2012: Adobe Systems (ADBE), Amazon (AMZN), Amgen (AMGN), Apple (AAPL), Bed Bath & Beyond (BBBY), Cisco Systems (CSCO), Comcast (CMCSA), Costco Wholesale (COST), Dell (DELL), Dollar Tree (DLTR), Expedia (EXPE), Garmin (GRMN), Google (GOOG), Intel (INTC), Mattel (MAT), Microsoft (MSFT), Netflix (NFLX), Oracle (ORCL), Research in Motion (RIMM), ScanDisk (SNDK), Sirius XM Radio (SIRI), Staples (SPLS), Starbucks (SBUX), Whole Foods Market (WFM), Wynn Resorts (WYNN), Yahoo (YHOO)

a. Compute the expected value and variance of the portfolio described next. AMZN (20.4%), AAPL (8.3%), DELL (9.4%), DLTR (62%)

b. Can you do better? That is, can you find a portfolio whose expected value is greater than or equal to 2% and whose variance is less than the one you calculated in part (a)?

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