Question

Calculate the expected returns, standard deviations and coefficient of variations of a two-stock portfolio. We have...

Calculate the expected returns, standard deviations and coefficient of variations of a two-stock portfolio. We have the following data for Stock 'C' and Stock 'S'.

Out of a total portfolio valuing SR 100,000, SR 40,000 is invested in stock 'C' and SR 60,000 in stock 'S'.

Stock C

Stock S

Expected Return

11%

25%

Standard Deviation

15%

20%

Correlation

0.3

Note: For calculation of expected returns, standard deviations and coefficient of variations, assume the following allocation mix to run a multiple scenario analysis.

Weight Stock C

100%

80%

60%

40%

20%

0%

Weight Stock S

0%

20%

40%

60%

80%

100%

In sum, your tasks are to calculate Expected Return, Standard Deviation and Coefficient of Variation for each of these scenarios using your own Excel model.

Graph your calculated results.

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