Homework answers / question archive / You are considering two securities, Stock A and Stock B, and the relevant information are given as below: Year 2013 2014 2015 2016 2017 2018 2019 Stock A Closing Price (RM) 0

You are considering two securities, Stock A and Stock B, and the relevant information are given as below: Year 2013 2014 2015 2016 2017 2018 2019 Stock A Closing Price (RM) 0

Finance

Share With

You are considering two securities, Stock A and Stock B, and the relevant information are given as below: Year 2013 2014 2015 2016 2017 2018 2019 Stock A Closing Price (RM) 0.51 0.12 0.28 0.37 0.87 0.94 1.42 Stock B Closing Price (RM) 1.67 1.38 1.70 1.85 2.00 1.99 2.18 (a) Calculate the average annual return for each stock. (8 marks) (b) Calculate the standard deviation for each stock. (7 marks) (c) You plan to buy 100,000 shares from both companies. The current market price for Stock A and Stock B are RM0.12 and RM1.38 respectively. Assume the correlation between the stocks is 0.46. i. Calculate the weightage for your portfolio. (2 marks) ii. Calculate the expected return of your portfolio. (3 marks) iii. Calculate the standard deviation of your portfolio.