Deep Water Financial of Duluth, Minnesota, has asked you to evaluate the stock price growth for a portfolio containing the following firms: General Motors, International Business Machines, Potlatch, Inc., Sea Containers, Ltd., and Tata Communications. Compute the means, variances, and covariance’s for the stocks. Using the data file Stock Price File, compute the mean and variance for a portfolio that represents the five stocks equally. Second, modify the portfolio by removing Potlatch and Sea Containers and including in the portfolio 40% General Motors, 30% International Business Machines, and 30% Tata Communications. Determine the mean and variance for the second portfolio and compare it with the first. ---- Please show how you calculated it in Excel, thank you! Year 3M Company AB Volvo (ADR) Alcoa Inc. General Motors Corporation Intel Corporation International Business Machine Pearson PLC (ADR) Pentair, Inc. Potlatch Corporation Reliant Energy, Inc. SAFECO Corporation Safeway Inc. Sea Containers Ltd. Senior Housing Properties Trus TCF Financial Corporation TeleCommunication Systems, Inc 2001 84.32 16.5 36.55 24.89 26.66 108.1 14.49 34.81 44.44 26.24 55.68 34.21 0.08 22.68 17.93 3.56 2002 77.93 13.75 30.01 30.72 20.25 97.15 15.1 31.4 43.82 14.21 62.55 34.56 0.7 24.48 27.42 3.1 2003 77.5 9.42 29.57 19.42 24.96 82.2 11.87 34.52 50.98 10.32 56.5 23.66 12.54 16.91 27.14 2.2 2004 82.07 7.92 31.42 40.06 23.39 98.58 12.16 43.56 50.58 13.65 52.24 19.74 19.69 18.94 32.14 3.34 2005 85.03 6.12 38 53.4 32.05 92.68 11.21 22.85 34.77 7.36 38.93 21.91 18.25 17.23 25.68 4.94 2006 61.65 3.31 22.78 36.86 15.57 77.5 9.35 17.28 23.88 3.2 34.67 23.36 8.93 10.61 21.85 2.01 2007 59.11 3.28 35.55 48.6 31.45 120.96 12.28 18.26 29.32 16.51 31.15 41.75 13.68 13.91 23.99 5.45

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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Deep Water Financial of Duluth, Minnesota, has asked you to evaluate the stock price growth for a portfolio containing the following firms: General Motors, International Business Machines, Potlatch, Inc., Sea Containers, Ltd., and Tata Communications. Compute the means, variances, and covariance’s for the stocks.
Using the data file Stock Price File, compute the mean and variance for a portfolio that represents the five stocks equally. Second, modify the portfolio by removing Potlatch and Sea Containers and including in the portfolio 40% General Motors, 30% International Business Machines, and 30% Tata Communications. Determine the mean and variance for the second portfolio and compare it with the first.

----
Please show how you calculated it in Excel, thank you!

Year	3M Company	AB Volvo (ADR)	Alcoa Inc.	General Motors Corporation	Intel Corporation	International Business Machine	Pearson PLC (ADR)	Pentair, Inc.	Potlatch Corporation	Reliant Energy, Inc.	SAFECO Corporation	Safeway Inc.	Sea Containers Ltd.	Senior Housing Properties Trus	TCF Financial Corporation	TeleCommunication Systems, Inc
2001	84.32	16.5	36.55	24.89	26.66	108.1	14.49	34.81	44.44	26.24	55.68	34.21	0.08	22.68	17.93	3.56
2002	77.93	13.75	30.01	30.72	20.25	97.15	15.1	31.4	43.82	14.21	62.55	34.56	0.7	24.48	27.42	3.1
2003	77.5	9.42	29.57	19.42	24.96	82.2	11.87	34.52	50.98	10.32	56.5	23.66	12.54	16.91	27.14	2.2
2004	82.07	7.92	31.42	40.06	23.39	98.58	12.16	43.56	50.58	13.65	52.24	19.74	19.69	18.94	32.14	3.34
2005	85.03	6.12	38	53.4	32.05	92.68	11.21	22.85	34.77	7.36	38.93	21.91	18.25	17.23	25.68	4.94
2006	61.65	3.31	22.78	36.86	15.57	77.5	9.35	17.28	23.88	3.2	34.67	23.36	8.93	10.61	21.85	2.01
2007	59.11	3.28	35.55	48.6	31.45	120.96	12.28	18.26	29.32	16.51	31.15	41.75	13.68	13.91	23.99	5.45

Definition Definition Measure of central tendency that is the average of a given data set. The mean value is evaluated as the quotient of the sum of all observations by the sample size. The mean, in contrast to a median, is affected by extreme values. Very large or very small values can distract the mean from the center of the data. Arithmetic mean: The most common type of mean is the arithmetic mean. It is evaluated using the formula: μ = 1 N ∑ i = 1 N x i Other types of means are the geometric mean, logarithmic mean, and harmonic mean. Geometric mean: The nth root of the product of n observations from a data set is defined as the geometric mean of the set: G = x 1 x 2 ... x n n Logarithmic mean: The difference of the natural logarithms of the two numbers, divided by the difference between the numbers is the logarithmic mean of the two numbers. The logarithmic mean is used particularly in heat transfer and mass transfer. ln x 2 − ln x 1 x 2 − x 1 Harmonic mean: The inverse of the arithmetic mean of the inverses of all the numbers in a data set is the harmonic mean of the data. 1 1 x 1 + 1 x 2 + ...

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