Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. calculate the monthly return of the stocks of ibm

Calculate the monthly return of the stocks of IBM and INTEL, each, from June 1,...

60.1K

Verified Solution

Question

Finance

Calculate the monthly return of the stocks of IBM and INTEL, each, from June 1, 2008 to June 1, 2018. (Yahoo Finance provides monthly returns! Go to Historical Dataprovided in the middle bar menu of Yahoo Finance page for each company and use the prices given under adjusted close, which adjusts for splits and dividends!)

1. What is the average monthly risk premium offered by IBM over the time frame given above? How about by INTEL? (assume that monthly rate on a 3-month US T-Bill is 0.0025).

2. What is the monthly expected return and the standard deviation of a portfolio that is composed of

a) 10% IBM, 90% INTEL?

b) 20% IBM, 80% INTEL?

c) 30% IBM, 70% INTEL?

d) 40% IBM, 60% INTEL?

e) 50% IBM, 50% INTEL?

f) 60% IBM, 40% INTEL?

g) 70% IBM, 30% INTEL?

h) 80% IBM, 20% INTEL?

i) 90% IBM, 10% INTEL?

3. What is the composition of a portfolio that is comprised of IBM and INTEL stocks and that has the lowest standard deviation?

4. You have $10K. What is the monthly expected value and the standard deviation of a portfolio that is formed by investing $5K at the risk free rate and $5K on the portfolio you found in question 2 (assume that monthly risk free rate is 0.0025)

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students