Two Stock Portfolio - Expected Returns, Standard Deviaiton, Variance, and Coefficient of Variation

Shpaner, Leon - University of California, San Diego - Financial Modeling with Excel

PORTFOLIOS: Return & Risk via Finance & Excel Complete the following tasks (based on the principles shown in the text book, instructor learning materials as well your own prior course work):

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’.

	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.

For extra-credit, graph your calculated results. 😃

The learning goals from this assignment are: Develop competency in calculating expected return and risk metrics for a multi-asset portfolio [in this instance and for exercise purposes, a two-asset portfolio].