Response to the following problem:
State your portfolio objectives. Then construct a 10-share portfolio that you feel is consistent with your objectives. (Use companies that have been public for at least five years.) Obtain annual dividend and price data for each of the past five years.
a. Calculate the historical return for each share for each year.
b. Calculate the historical portfolio return for each of the five years, using your findings in part a.
c. Use your findings in part b to calculate the average portfolio return over the five years.
d. Use your findings in parts b and c to find the standard deviation of the portfolio's returns over the five-year period.
e. Use the historical average return from part c and the standard deviation from part d to evaluate the portfolio's return and risk in light of your stated portfolio objectives.