Question: Please advise on how to solve this using Excel and please show the formulas. Thanks! You work for a small investment management firm. You have
Please advise on how to solve this using Excel and please show the formulas. Thanks!
You work for a small investment management firm. You have been provided with the following
historical information for three stocks and the market index. The information is shown in the table
below. The amounts are in dollars $
Using the data provided, calculate the following for each of the three stocks and the market index:
a What is the average annual return for the past thirteen years?
b What is the geometric average annual return for the past thirteen years?
c What is the population standard deviation and the sample standard deviation?
d What is the correlation coefficient between the returns of stock AAA and stock BBB Stock
AAA and stock CCC Stock BBB and stock CCC
e What is the sample covariance between the returns of stock AAA and stock BBB Stock AAA
and stock CCC Stock BBB and stock CCC
f What is the coefficient of variation of each of the three stocks and the market index? Use the
sample standard deviation not the population one in your calculations.
g What is the beta of each of the three stocks? Use Excel's "slope" function to estimate this.
h Assume that the beta of stock AAA is the beta of stock BBB is and the beta of
stock CCC is What is the beta of a portfolio with invested in stock AAA,
invested in stock BBB and invested in stock CCC
i Assuming the riskfree rate is and the expected return on the market is what is
the expected return on the portfolio created in question
Please advise on how to solve this using Excel and please show the formulas. Thanks!
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