Zafer Toprak is a 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 Alcoa Inc., 20 shares from AB Volvo, 10 shares from TCF Financial, and 20 shares from Pentair Inc. 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, and 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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