Return on Stock Return on Stock Oman Cement Return on Stock State Probability Raysut Cement 11 Dhofar Cement 25% 15% 20% 15% Find? 1 13 12 9 15 12 10 14 12 12 13 12 16 12 14 Use the above information and try to answer the following: Assume you are the investor who wants to invest in a two stock/security portfolio made from the above stocks of your choice? a) Find the expected return of your portfolio formed from the two stocks of your choice given above AND you will decide their weights in the portfolio. b) Calculate your returns from the portfolio assuming you invest OMR 10000 c) Find the Covariance and correlation coefficient for your portfolio d) Justify as to on what basis did you choose these stocks and how did you decide the weights?

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Assignment Exercise 1:
Return on Stock
Return on Stock
Dhofar Cement
Return on Stock
State
Probability
Raysut Cement
11
Oman Cement
1
25%
13
12
15%
9
15
12
20%
15%
3
10
14
12
4
12
12
12
5
Find?
13
16
14
Use the above information and try to answer the following:
Assume you are the investor who wants to invest in a two stock/security portfolio made from the above
stocks of your choice?
a) Find the expected return of your portfolio formed from the two stocks of your choice given above
AND you will decide their weights in the portfolio.
b) Calculate your returns from the portfolio assuming you invest OMR 10000
c) Find the Covariance and correlation coefficient for your portfolio
d) Justify as to on what basis did you choose these stocks and how did you decide the weights?
Transcribed Image Text:Assignment Exercise 1: Return on Stock Return on Stock Dhofar Cement Return on Stock State Probability Raysut Cement 11 Oman Cement 1 25% 13 12 15% 9 15 12 20% 15% 3 10 14 12 4 12 12 12 5 Find? 13 16 14 Use the above information and try to answer the following: Assume you are the investor who wants to invest in a two stock/security portfolio made from the above stocks of your choice? a) Find the expected return of your portfolio formed from the two stocks of your choice given above AND you will decide their weights in the portfolio. b) Calculate your returns from the portfolio assuming you invest OMR 10000 c) Find the Covariance and correlation coefficient for your portfolio d) Justify as to on what basis did you choose these stocks and how did you decide the weights?
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