Question: Go on Yahoo finance and extract the expected return form the Adjusted close prices for the last 12 month for American Airline Group (AAL) and
Go on Yahoo finance and extract the expected return form the Adjusted close prices for the last 12 month for American Airline Group (AAL) and Exxon Mobil corporation (XOM). Calculate: 1. the monthly expected return, standard deviation for both companies. 2. The coefficient of variation and the Correlation coefficient between the two stocks. 3. Create a portfolio that consists of these two securities with different weights as we did in class then calculate expected return for your portfolio and standard deviation at different weights. 4. Compared the result to the individual's risk inherited by just carrying on an individual stock. Does diversification impact the expected return and the expected risk? What information can we extract from the coefficient of variation
Step by Step Solution
There are 3 Steps involved in it
1 Expert Approved Answer
Step: 1 Unlock
Question Has Been Solved by an Expert!
Get step-by-step solutions from verified subject matter experts
Step: 2 Unlock
Step: 3 Unlock
