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The task of best stock solutions: Renee is cons...

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The task of best stock solutions: Renee is considering investing in three different stocks or creating three distinct two stock portfolios. Renee considers herself to be a conservative investor. She is able to obtain forecasted returns for the three securities for the years 2013 through 2019. The data are as follows: Year Stock A Stock B Stock C 2013 10% 10% 12% 2014 13% 11% 14% 2015 15% 8% 10% 2016 14% 12% 11% 2017 16% 10% 9% 2018 14% 15% 9% 2019 12% 15% 10% In Any of the two possible stock portfolios, the weight of each stock in the portfolio will be 50%. The three possible portfolio combinations are AB, AC, BC. To Do Create a spreadsheet to answer the following questions? A. Calculate the expected return for each individual stock . B. Calculate the standard Deviation for each individual stock. C.Calculate the expected returns for portfolio AB, AC, BC. D.Calculate the standard Deviations for portfolios AB, AC, BC E.Would you recommend that Jane invest in single stock A or the portfolio consisting of stocks A and B ? Explain your answer from a risk return view point. F.Would you recommend that Jane invest in the single stock B or the portfolio consisting of stocks B and C ? Explain your answer from a risk return view point.

 

Paper#7080 | Written in 18-Jul-2015

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