Professional Assignment 1 – CLO 1, CLO 5
You can download data for the following questions from
finance.yahoo.com
.
Pick two stocks, say Walmart and IBM. Look at their monthly closing prices for last 4 years and
a. Calculate Beta for each of them.
b. Using the CAP.M. model, calculate the expected return for each. Assume a market risk premium of 8% and risk free rate of 4%.
c. Calculate the standard deviation for each stock.
d. Calculate the correlation coefficient between the two stocks.
e. Form portfolios of the two stocks by changing their weights between zero and one hundred percent and measure the risk and return of those portfolios
f. Using excel, graph the efficient frontier.
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