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You are a junior analyst at New Guy Financial Management. The Head Analyst is doing an analysis for a potential client and explaining the value of diversification and has asked you to look at the historical returns for Austen Corp., Dickens Corp., and a portfolio with 506 weights of each of these stocks. Based on the information you have compiled below please calculate the average return and standard deviation over this 5 year period for each of the stocks and the portfolio. Once you have done that please explain to the Head Analyst how the results show the value of diversification. Returns Year Austen Corp. Dickens Corp. Austen/Dickens Portfolio 2016 40% 40% 40% 2017 -10% 15% 3% 2018 35% -5% 15% 2019 -5% -10% -8% 2020 15% 35% 25%

You are a junior analyst at New Guy Financial Management. The Head Analyst is doing an analysis for a potential client and explaining the value of diversification and has asked you to look at the historical returns for Austen Corp., Dickens Corp., and a portfolio with 506 weights of each of these stocks. Based on the information you have compiled below please calculate the average return and standard deviation over this 5 year period for each of the stocks and the portfolio. Once you have done that please explain to the Head Analyst how the results show the value of diversification. Returns Year Austen Corp. Dickens Corp. Austen/Dickens Portfolio 2016 40% 40% 40% 2017 -10% 15% 3% 2018 35% -5% 15% 2019 -5% -10% -8% 2020 15% 35% 25%

Essentials Of Investments
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
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Based on the information you have compiled below please calculate the average return and standard deviation over this 5 year period for each of the stocks and the portfolio.  Once you have done that please explain to the Head Analyst how the results show the value of diversification.

You are a junior analyst at New Guy Financial Management. The Head Analyst is doing an analysis for a potential client and explaining the value of diversification and has asked you to look at the historical returns for Austen Corp., Dickens Corp., and a portfolio with 50% weights of each of these stocks. Based on the information you have compiled below please calculate the average return and standard deviation over this 5 year period for each of the stocks and the portfolio. Once you have done that please explain to the Head Analyst how the results show the value of diversification. Returns Year Austen Corp. Dickens Corp. Austen/Dickens Portfolio 2016 40% 40% 40% 2017 -10% 15% 3% 2018 35% -5% 15% 2019 -5% -10% -8% 2020 15% 35% 25% For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac).
Transcribed Image Text:You are a junior analyst at New Guy Financial Management. The Head Analyst is doing an analysis for a potential client and explaining the value of diversification and has asked you to look at the historical returns for Austen Corp., Dickens Corp., and a portfolio with 50% weights of each of these stocks. Based on the information you have compiled below please calculate the average return and standard deviation over this 5 year period for each of the stocks and the portfolio. Once you have done that please explain to the Head Analyst how the results show the value of diversification. Returns Year Austen Corp. Dickens Corp. Austen/Dickens Portfolio 2016 40% 40% 40% 2017 -10% 15% 3% 2018 35% -5% 15% 2019 -5% -10% -8% 2020 15% 35% 25% For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac).
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