The following information relates to the prices and dividends of two stocks listed on the Ghana Stock Exchange as well as the average market returns. Stock A Stock B Year Price Div Price Div Market Returns 2011 20 0 11 0 0 2012 24 1.2 13 1.6 0.25 2013 26 0.5 17 0.5 0.18 2014 31 1 20 0.9 0.11 2015 33 1.5 23 1.2 0.12 2016 40 2 27 1.5 0.15
The following information relates to the prices and dividends of two stocks listed on the Ghana Stock Exchange as well as the average market returns. Stock A Stock B Year Price Div Price Div Market Returns 2011 20 0 11 0 0 2012 24 1.2 13 1.6 0.25 2013 26 0.5 17 0.5 0.18 2014 31 1 20 0.9 0.11 2015 33 1.5 23 1.2 0.12 2016 40 2 27 1.5 0.15
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
The following information relates to the prices and dividends of two stocks listed on the Ghana Stock Exchange as well as the average market returns.
|
Stock A |
Stock B |
|
||
Year |
Price |
Div |
Price |
Div |
Market Returns |
2011 |
20 |
0 |
11 |
0 |
0 |
2012 |
24 |
1.2 |
13 |
1.6 |
0.25 |
2013 |
26 |
0.5 |
17 |
0.5 |
0.18 |
2014 |
31 |
1 |
20 |
0.9 |
0.11 |
2015 |
33 |
1.5 |
23 |
1.2 |
0.12 |
2016 |
40 |
2 |
27 |
1.5 |
0.15 |
Required.
- Calculate the annual returns for each stock (2012-2016)
- Calculate the average returns for each of the stocks and the market
- Calculate the covariance between the stocks
- Assuming the two stocks are equally weighted, calculate the portfolio return and portfolio risk
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