Find the correlation between your stock and its probability


Using the last two years`data for the stock you used in Assignment 1, do the following: a. Draw a line chart showing the probability of default and your stock price. (Use function DRSK for default). Output: Just submit a chart. b. Find the correlation between your stock and its probability of default. Comment on it. Output: Just submit a number and comment. c. Choose another stock and form a portfolio of two stocks with equal weights. Calculate the last average return (=AVERAGE) and standard deviation (=ST.DEV) for your portfolio. Output: Just submit a two numbers in the main file. The details should be in Excel. d. Calculate the portfolio return using the following formula and compare with what you found in (c) and comment on them. Rp =XaRa+XbRb XA: The weight of the stock A. XB: The weight of the stock B. Output: Just submit a number in the main file. The details should be in Excel. Submission Guideline: You must submit one main file as a pdf or word format. Its name must be “Main File_Your Name”. You should also submit an Excel file to check your calculations. Open a seperate sheet in the Excel file for each question, i.e. a, b, c,d. Your assignment will mainly be graded what you have in the main file. Excel is for checking purposes. Make sure that you use proper axis names, titles etc in your charts.

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Financial Management: Find the correlation between your stock and its probability
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