You are a junior analyst at New Guy Financial Management. The Head Analyst is doing an...
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You are a junior analyst at New Guy Financial Management. The Head Analyst is doing an analysis for a potential client and explaining the value of diversificat and has asked you to look at the historical returns for Austen Corp., Dickens Corp., and a portfolio with 50% weights of each of these stocks. Based on the information you have compiled below please calculate the average return and standard deviation over this 5 year period for each of the stocks and the portfo Once you have done that please explain to the Head Analyst how the results show the value of diversification. Returns Year For the toolb 2016 2017 2018 2019 2020 Austen Corp. 40% -10% 35% -5% 15% Dickens Corp. 40% 15% -5% -10% 35% Austen/Dickens Portfolio 40% 3% -15% -8% 25% You are a junior analyst at New Guy Financial Management. The Head Analyst is doing an analysis for a potential client and explaining the value of diversificat and has asked you to look at the historical returns for Austen Corp., Dickens Corp., and a portfolio with 50% weights of each of these stocks. Based on the information you have compiled below please calculate the average return and standard deviation over this 5 year period for each of the stocks and the portfo Once you have done that please explain to the Head Analyst how the results show the value of diversification. Returns Year For the toolb 2016 2017 2018 2019 2020 Austen Corp. 40% -10% 35% -5% 15% Dickens Corp. 40% 15% -5% -10% 35% Austen/Dickens Portfolio 40% 3% -15% -8% 25%
Expert Answer:
Answer rating: 100% (QA)
To calculate the average return and standard deviation over the 5year period for each stock and the portfolio we can use the following formulas Averag... View the full answer
Related Book For
Essentials of Business Communication
ISBN: 978-1111821227
9th edition
Authors: Mary Ellen Guffey, Dana Loewy
Posted Date:
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