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Question

I would like verification on my work.


1) Find the correlation values of the returns of the MGM

stock and the other 3 stocks.

Answer: MGM 1 IBM 0.238056534 Costco 0.371141825 GE 0.606511554


2) Enter the name of the stock with returns most closely related (in a linear fashion) to the MGM stock.

Answer: GE


3) Find the expected (mean) return of her portfolio

Answer: 0.00194585


4) Then find the standard deviation of the return

Answer: 0.156873774


Relevant Data:

MGM 0.0156 -0.0217 -0.0327 0.1826 0.0371 -0.1136 0.1485 0.0651 0.0243 -0.0558 -0.0287 -0.1345 -0.1531 -0.0458 -0.1297 -0.0379 -0.3113 -0.1437 0.2126 -0.1901 -0.4225 -0.2722 0.1486 -0.4186 -0.5625 -0.3343 2.5966 -0.1098 -0.1434 0.1315 0.1715 0.4215 -0.2301 0.1402


IBM -0.0626 0.0142 0.0843 0.043 -0.0127 0.0513 0.0546 0.0095 -0.0143 -0.0942 0.0278 -0.0092 0.063 0.0112 0.0483 0.0723 -0.0842 0.0797 -0.0488 -0.0392 -0.2051 -0.1223 0.0314 0.089 0.0041 0.0528 0.0652 0.0297 -0.0175 0.1294 0.001 0.0132 0.0084 0.0476


Costco -0.0049 -0.0342 -0.0051 0.057 0.0362 0.0219 0.0351 -0.0063 0.096 0.0021 0.0372 -0.0261 -0.0885 0.0514 0.0969 0.0009 -0.0144 -0.1064 0.0698 -0.0293 -0.1221 -0.0971 0.0231 -0.1423 -0.0598 0.098 0.0492 -0.0016 -0.053 0.0814 0.03 0.1099 0.0085 0.0569


GE -0.0316 0.0129 0.0424 0.0195 0.0186 0.0125 0.0028 0.0651 -0.0058 -0.0697 -0.0319 -0.0461 -0.0628 0.1168 -0.1165 -0.0606 -0.1312 0.0599 -0.0067 -0.0925 -0.2349 -0.1199 -0.0565 -0.2512 -0.2984 0.188 0.2512 0.0656 -0.1306 0.1433 0.0373 0.1813 -0.1315 0.1234


Amount Invested:

MGM $6,700

IBM $6,800

Costco $6,300

GE $7,700

Top Answer

Part a) Answer: MGM 1 IBM 0.238056534 Costco 0.371141825 GE 0.606511554 Part b) Since the GE has... View the full answer

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