Question

As a team, pick 5 large ( > $1 billion market cap) publicly traded companies that you might want to invest in. Make sure all 5 companies have been publicly traded with daily price data available in Yahoo Finance for at least the last 5 years. Create a portfolio that invests 24% of $1 million in company A, 22% in company B, 20% in company C, 18% in company D, and 16% in company E. (APPLE, MACYS, AMAZON, FACEBOOK, MICROSOFT) - 5 COMPANIES What I need from each team:

Tab 2. Please enter the buy-and-hold return (HPR) for each of the 5 stocks and for the portfolio during the last calendar year (2018). This means you are buying on Dec 31, after markets close, and selling on Dec 31 of the following year, after markets close. Please make sure to show your work. You will need stock price/return data on the 5 companies. To get the stock price/return data, go to Yahoo Finance, enter the ticker, click on “Historical Prices”, select the start and end date, and make sure “daily” is selected. Click on “Get Prices”, and use Adj. Close to calculate returns (Adj. Close adjusts for dividends, stock splits, etc.).

Tab 3. Please enter the return correlations for the 5 stocks during the last calendar year. Please use daily returns, and make sure to show your work.

Answer 1

Tab 2 Holding Period Return:

Notes:

1. All data downloaded from Yahoo Finance
2. The price shown in this solution is adjusted close price
3. Last trading day in the year 2017 is 12 / 29 / 2017
4. Last trading day in the year 2018 is 12 / 28 / 2018

Please pay special attention to the column titled "Linkage". That explains the mathematics behind each calculation. Your HPR is shown in the last row, also highlighted in yellow color.

Due to character restriction in the answer i can't paste the entire table. I have to therefore paste it as picture.