Question: Calculate the risk and return of two asset combinations of the three stocks and a...

Question

Question: Calculate the risk and return of two asset combinations of the three stocks and a portfolio comprising all three assets. Discuss the differences in the risk and return of the different portfolios.
The spreadsheet is attached that the calculations should be completed in.

south-carolina-spreadsheet-3dwowzyk.xlsx

Shakeel · Accepted Answer

Copyright
	THE STATE OF SOUTH CAROLINA
	Harvard Business School Case 9-201-061
	Case Software 2-201-715 (2nd Edition)
	Copyright © 2000 by the President and Fellows of Harvard College  
	This case was prepared as the basis for class discussion rather than to 
	illustrate either effective or ineffective handling of an administrative situation.
Exhibit 2a
	Exhibit 2     Monthly Returns for Dow 30 Stocks
		ALUMINUM COMPANY AMER			ALLIED SIGNAL INC			AMERICAN EXPRESS CO
		Return (%)	Market Cap ($ bil)		Return (%)	Market Cap ($ bil)		Return (%)	Market Cap ($ bil)
	31-Jan-90	-15.8	6.59		-2.5	5.23		-14.7	14.55
	28-Feb-90	4.7	5.39		4.6	5.1		-2.1	12.41
	30-Mar-90	0.8	5.64		5.3	5.27		-11.6	12.15
	30-Apr-90	-3.6	5.69		-5.1	5.33		6.2	10.74
	31-May-90	6.5	5.44		5.2	5.06		7.8	11.31
	29-Jun-90	-3.4	5.8		0.7	5.26		5.9	12.2
	31-Jul-90	9.7	5.54		-8.2	5.29		-5.3	12.82
	31-Aug-90	-7.4	6.04		-6.8	4.86		-17.2	12.14
	28-Sep-90	-2.7	5.6		-10.1	4.46		-12.4	10.06
	31-Oct-90	-14.5	5.4		-9.9	3.86		-9.6	9.77
	30-Nov-90	3.3	4.58		12.2	3.48		8.6	8.73
	31-Dec-90	5	4.73		-2.7	3.84		1.7	9.48
	31-Jan-91	12.7	4.89		7.4	3.64		10.3	9.57
	28-Feb-91	-0.4	5.46		4.1	3.91		5.5	10.55
	28-Mar-91	2.1	5.44		-2.5	4.01		20.3	11.13
	30-Apr-91	3.7	5.56		2.2	3.91		-12.6	13.41
	31-May-91	5.4	5.73		2.4	3.99		2.5	11.61
	28-Jun-91	-5.1	6.03		10.5	4.02		-11.3	11.9
	31-Jul-91	5.2	5.73		17.8	4.48		12.8	10.56
	30-Aug-91	-1.9	5.99		-0.1	5.28		4.4	11.91
	30-Sep-91	-7.8	5.88		-5.5	5.21		-2.4	12.43
	31-Oct-91	-0.2	5.43		14.5	4.95		-25.9	12.04
	29-Nov-91	-7.7	5.39		-5.7	5.67		0	8.93
	31-Dec-91	10	4.98		12.9	5.31		9.2	8.93
	31-Jan-92	0.2	5.48		12.8	6.03		0.6	9.64
	28-Feb-92	8.2	5.49		0.8	6.8		1.8	9.7
	31-Mar-92	1.6	5.9		1.8	6.82		10.1	9.88
	30-Apr-92	10.3	6		15.3	6.98		-1.6	10.8
	29-May-92	0.3	6.58		0	8.05		1.1	10.62
	30-Jun-92	-2.3	6.6		-7.3	8.01		3.3	10.74
	31-Jul-92	-2.8	6.49		3.3	7.54		-1.1	11.04
	31-Aug-92	-11.8	6.31		-5.2	7.78		-9.2	10.92
	30-Sep-92	2.5	5.53		-0.7	7.34		6	9.91
	30-Oct-92	5.3	5.67		6.7	7.34		-2.3	10.43
	30-Nov-92	1.1	5.97		3.4	7.83		7	10.19
	31-Dec-92	2.1	6.01		5.9	8.06		8.7	10.91
	29-Jan-93	3.8	6.14		-4.8	8.57		-5.5	11.89
	26-Feb-93	-5.2	6.37		14.8	8.16		5.4	11.11
	31-Mar-93	-8	6.01		1.1	9.33		11.7	11.71
	30-Apr-93	2.5	5.53		-2.1	9.45		3.2	12.97
	28-May-93	2.7	5.67		2.7	9.26		2.7	13.

Question: Calculate the risk and return of two asset combinations of the three stocks and a portfolio comprising all three assets. Discuss the differences in the risk and return of the different...

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