Shirley Johnson is developing a new mutual fund portfolio and in the process has asked you to develop the mean and variance for the stock price that consists of 10 shares of stocks from each of the following firms: Alcoa Inc., Reliant Energy, and Sea Container.
Using the data file Stock Price File, compute the mean and variance for this portfolio. Prepare the analysis by using means, variances, and covariances for individual stocks following the methods used in Examples 5.16 and 5.17 then confirm your results by obtaining the portfolio price for each year using the computer. Assuming that the portfolio price is normally distributed, determine the narrowest interval that contains 95% of the distribution of portfolio value.

  • CreatedJuly 07, 2015
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