In a 2- to 3-page paper, compare the risk/return trade-off of the investments of each company and then, in beginning your executive summary describe how making these investments will position the...

Two stocks which are chosen are Northern trust and ED, ED business is mainly into
designing Services and products for home enhancement needs, whereas Northern trust
provides many products and services specific to digital space.
Beta value of Northern trust is equal to 0.95 this advocates that variation in Northern trust
stock is 95% of the variation in stock market, beta value for ED is 1.44 this indicates that
variation in ED stock is equal to 144% of variation in the stock market.
The conclusion in our case is stock of Northern trust is comparatively less volatile than the
benchmark index, whereas on the other hand stock of ED is 44% further more volatile than
the benchmark index.
Part C
ED
Date
Adj
Close
Reteurns
(p2-
p1)/p1
01/06/2016 127.69
01/07/2016 138.24 8.26%
01/08/2016 134.12 -2.98%
01/09/2016 128.68 -4.06%
01/10/2016 122.01 -5.18%
01/11/2016 129.4 6.06%
01/12/2016 134.08 3.62%
01/01/2017 137.58 2.61%
01/02/2017 144.91 5.33%
01/03/2017 146.83 1.32%
01/04/2017 156.1 6.31%
01/05/2017 156.92 0.53%
12/05/2017 156.92 0.00%
Mean returns ∑ri/n 1.82%
Std dev sqrt∑(ri-r)^2/n 4.34%
From ED financial statements
Net income in 2015 in $
billion 7
Net income in 2016 in $
billion 7.95
Increase in net income 13.57%
Mean will be calculated as = (8.26% - 2.98% ……. + 8.67% + 0%) / 13 = 1.82%
Std dev will be calculated as = sqrt ( (8.26% - 1.82%)
2
+ …….. (0% - 1.82%)
2
) = 4.55%
Net income is now taken from 10 K financial statement of ED
Increase in income will be calculated as = (Net income in 2016 in $ billion - Net income in
201 5in $ billion) / Net income in 2015 in $ billion = 13.57%
Date
Adj
Close
Reteurns
(p2-
p1)/p1
01/06/2016 692.1
01/07/2016 768.79 11.08%
01/08/2016 767.05 -0.23%
01/09/2016 777.29 1.33%
01/10/2016 784.54 0.93%
01/11/2016 758.04 -3.38%
01/12/2016 771.82 1.82%
01/01/2017 796.79 3.24%
01/02/2017 823.21 3.32%
01/03/2017 829.56 0.77%
01/04/2017 905.96 9.21%
01/05/2017 932.22 2.90%
12/05/2017 932.22 0.00%
Mean returns...