Portfolio Management Case study 1
*Please give details of your calculation, round to 4 decimal places
You did research and found out the historical market information of two US companies,
Apple and Walmart (Close/Last price is the only information you use for your case study):
1. Find the daily returns of both companies on on Dec.23, Dec.22, Dec21 and Dec.20
2. Calculate the arithmetic mean returns of both companies
3. Find the historical standard deviation of both companies (use results of Question 1)
Now you form a portfolio with Apple and Walmart with equal weights (50% of your wealth
is allocated to Apple and 50% to Walmart)
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Calculate the daily returns of your portfolio on Dec23, 22, 21, and 20
Calculate the arithmetic daily mean return of the your portfolio
Calculate the standard deviation of your portfolio (use results of Question 4)
Calculate the weighted average standard deviation of Apple and Walmart.
Compare the results from Question 6 and 7, what do you find?