Professional Assignment
You can download data for the following questions from yahoo finance.
Pick two stocks, say Walmart and IBM. Look at their monthly closing prices for last 4 years and
a. Calculate Beta for each of them
b. Using the CAPM model, calculate the expected return for each. Assume a market risk premium of 8% and risk free rate of 4%.
c. Calculate the standard deviation for each stock
d. Calculate the correlation coefficient between the two stocks
e. Form portfolios of the two stocks by changing their weights between zero and hundred percent and measure the risk and return of those portfolios
f. Using excel, graph the efficient frontier.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.