# FIN305 HW2 NKU Principles Of Finance

*label*Business Finance

*timer*Asked: Feb 2nd, 2019

*account_balance_wallet*$15

### Question Description

I will post the document it is about Finance ( Principles of Finance ) show me the work please and let me know if there is any question or you need any things about this assignment.

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## Tutor Answer

Attached.

Running head: ANALYSIS OF THE STOCK PORTFOLIO

Analysis of the portfolio stock

Student’s Name

Institutional Affiliation

1

ANALYSIS OF THE STOCK PORTFOLIO

2

Analysis of the portfolio stock

Problem 1

Computation of the average rate of return on the portfolio, there are number of steps which you need

to be conversant with them. First, calculate the value for total portfolio. It can be done by segregating

provided portfolio into annual periods. Then find first year’s ending value.

Stock

Return

Weight Product

A

21%

0.3

6.30%

B

5%

0.7

3.50%

Average return

9.80%

Problem 2

𝐶𝑂𝑉(𝑎,𝑏)

−0.0095

Correlation between stock A and B => 𝑆𝐷 𝑜𝑓 𝐴∗𝑆𝐷 𝑜𝑓 𝐵 = 0.4 𝑥 0.15 => -0.1583

Stock

A

B

Average return

Correlation

Return Weight

Product

21%

0.3

6.30%

5%

0.7

3.50%

9....

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