Microsoft Word - finc_3330_final_project.docx FINC 3330: Final Assignment Due: May 22, 2020, 11:59 P.M Note: Use Blackboard to submit this project (as we have been doing). DO NOT send me it via email....

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Answered Same DayDec 09, 2021

Answer To: Microsoft Word - finc_3330_final_project.docx FINC 3330: Final Assignment Due: May 22, 2020, 11:59...

Tanmoy answered on Dec 13 2021
159 Votes
Sheet1
            Coca Cola    Pepsi
        Date    KO Close    PEP Close    KO Returns    PEP Returns    Portfolio Return        KO    PEP    Mean    Variance    Standard Deviation
        12/2/19    51.971497    131.113968                    0%    100%    0.06%    0.00053223    2.31%
        12/3/19    52.01984    130.708694    0.09%    -0.31%    -0.11%        2%    98%    0.06%    0
.0005113429    2.26%
        12/4/19    52.493633    132.484177    0.91%    1.36%    1.13%        4%    96%    0.06%    0.00049126    2.22%
        12/5/19    52.396938    132.479294    -0.18%    -0.00%    -0.09%        6%    94%    0.06%    0.0004719814    2.17%
        12/6/19    52.619328    133.470413    0.42%    0.75%    0.59%        8%    92%    0.06%    0.0004535069    2.13%
        12/9/19    52.280907    133.276077    -0.64%    -0.15%    -0.39%        10%    90%    0.06%    0.0004358366    2.09%
        12/10/19    51.990837    132.411285    -0.55%    -0.65%    -0.60%        12%    88%    0.06%    0.0004189706    2.05%
        12/11/19    52.164883    133.217789    0.33%    0.61%    0.47%        14%    86%    0.06%    0.0004029087    2.01%
        12/12/19    52.348595    133.295502    0.35%    0.06%    0.21%        16%    84%    0.06%    0.0003876511    1.97%
        12/13/19    52.619328    134.033997    0.52%    0.55%    0.54%        18%    82%    0.06%    0.0003731977    1.93%
        12/16/19    52.619328    133.178894    0.00%    -0.64%    -0.32%        20%    80%    0.06%    0.0003595485    1.90%
        12/17/19    52.619328    132.314102    0.00%    -0.65%    -0.32%        22%    78%    0.05%    0.0003467035    1.86%
        12/18/19    52.126205    132.119766    -0.94%    -0.15%    -0.54%        24%    76%    0.05%    0.0003346627    1.83%
        12/19/19    52.522636    132.605606    0.76%    0.37%    0.56%        26%    74%    0.05%    0.0003234261    1.80%
        12/20/19    53.151134    134.014557    1.20%    1.06%    1.13%        28%    72%    0.05%    0.0003129937    1.77%
        12/23/19    53.093117    133.15947    -0.11%    -0.64%    -0.37%        30%    70%    0.05%    0.0003033655    1.74%
        12/24/19    52.899734    133.013718    -0.36%    -0.11%    -0.24%        32%    68%    0.05%    0.0002945415    1.72%
        12/26/19    53.199478    132.819397    0.57%    -0.15%    0.21%        34%    66%    0.05%    0.0002865218    1.69%
        12/27/19    53.518559    133.645325    0.60%    0.62%    0.61%        36%    64%    0.05%    0.0002793062    1.67%
        12/30/19    53.441204    132.935989    -0.14%    -0.53%    -0.34%        38%    62%    0.05%    0.0002728949    1.65%
        12/31/19    53.518559    132.799957    0.14%    -0.10%    0.02%        40%    60%    0.05%    0.0002672878    1.63%    Results
        1/2/20    53.170471    131.974045    -0.65%    -0.62%    -0.64%        42%    58%    0.05%    0.0002624848    1.62%
        1/3/20    52.880394    131.789413    -0.55%    -0.14%    -0.34%        44%    56%    0.05%    0.0002584861    1.61%    As per the minimum variance portfolio the optimal weight that minimizes the portfolio standard deviation (risk) and maximizes the return is at 0.06% where the standard deviation is 2.17%. At the same point of standard deviation (risk) of 2.17%, the minimum return that can be achieved is 0.03%. Hence, the minimum variance of the portfolio is achieved at SD 2.17% with a return of 0.06%. In this case, we can also observe that the maximum return of 0.06% can be achieved only when we invest 6% of our investment in Coca Cola (KO) and 94% in Pepsi (PEP)....
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