Question

1. Following are recent returns on Google and on Coca-Cola.

Year Google Coca-Cola

2017 121.67% 29.27%

2016 -16.31% 26.35%

2015 6.46% 2.24%

2014 -15.83% 13.93%

2013 178.56% 21.94%

Required:

a) Compute the historical return and standard deviation for each company

b) Compute Coefficient of variation for both stocks

To solve (c-e), assume a portfolio of $60,000 invested in these two stocks: with $24,000 invested in Google and $36,000 invested in Coca-Cola.

c) Compute the portfolio return earned in each year

d) Compute the average portfolio return earned during the years (2013-2017)

e) Compute the portfolio standard deviation

Answer 1