Choose two publicly traded stocks and fill in their tickers to cells B3 and B4 of FrontSheet.For your chosen stocks, work out the following tasks.1. On sheet Q1, compute the weekly returns of the chosen stocks over the last 150 weeks(prior to 22nd April 2024).2. For each stock, plot a histogram of its returns.3. Estimate the means, variances and the correlation of the two stocks. (If the computedcorrelation is 1 or -1, please choose a different set of stocks for all questions.)4. Calculate the value at risk of the returns at confidence level 95% of each stock.5. Plot the efficient frontier of a portfolio consisting of the two chosen stocks.6. Suppose that the weekly interest rate is 0.1%. Calculate the Sharpe ratio of this port-folio.7. How does the Sharpe ratio of such portfolio change if the weekly interest rate decreases?Justify your answer by numerical evidences.

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Answered: Choose two publicly traded stocks and…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter13: Regression And Forecasting Models

Section: Chapter Questions

Problem 41P

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The average return for large-cap domestic stock funds over the three years 2009-2011 was 14.6%. Assume the three-year returns were normally distributed across funds with a standard deviation of 4.8%. a. What is the probability an individual large-cap domestic stock fund had a three-year return of at least 20% (to 4 decimals)? b. What is the probability an individual large-cap domestic stock fund had a three-year return of 10% or less (to 4 decimals)? c. How big does the return have to be to put a domestic stock fund in the top 10% for the three-year period (to 2 decimals)? %
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ou have been pricing Samsung-Galaxy SmartWatch in several stores. Three stores have the identical price of $400. Each store charges 18 percent APR, has a 30-day grace period, and sends out bills on the first of the month. On further investigation, you find that store A calculates the finance charge by using the average daily balance method, store B uses the adjusted balance method, and store C using the previous balance method. Assume you purchased the SmartWatch on May 5 and made a $100 payment on June 15. What will the finance charge for June be if you made your purchase from store A? From store B? From store C?
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