Question

Intro Go to Yahoo Finance and download monthly stock price data for Apple (AAPL), Amazon (AMZN) and Alphabet (GOOG) for all of 2015, 2016 and 2017. BAttempt 1/10 for 10 pts. Part 1 Use the adjusted close prices to calculate monthly returns. What was the arithmetic average monthly return for Alphabet? 4+ decimals Submit Attempt 1/10 for 10 pts. Part 2 What was the arithmetic average monthly return for a portfolio 10% invested in Apple, 20% invested in Amazon and the remainder in Alphabet? 4+ decimals Submit Part 3 What was the standard deviation of the portfolio? 3+ decimals Submit Attempt 1/10 for 10 pts.

Answer 1

To calculate the arithmetic average monthly return for Alphabet, you need to first calculate the monthly returns using the adjusted close prices and then find the average of these monthly returns. The arithmetic average monthly return for a portfolio invested in Apple, Amazon, and Alphabet can be calculated by multiplying the weight of each stock by its average monthly return and summing up these values. To calculate the standard deviation of the portfolio, you need to know the monthly returns of each stock in the portfolio and their respective weights.

Step-by-step explanation:

To calculate the arithmetic average monthly return for Alphabet, you need to first calculate the monthly returns using the adjusted close prices. Then, find the average of these monthly returns.

1. Download the monthly stock price data for Alphabet (GOOG) for each year (2015, 2016, 2017) from Yahoo Finance.
2. Calculate the monthly returns by using the formula: Monthly Return = (Adjusted Close Price for Month / Adjusted Close Price for Previous Month) - 1
3. Sum up the monthly returns for each year and divide it by the number of months to get the average monthly return.

The arithmetic average monthly return for a portfolio invested 10% in Apple (AAPL), 20% in Amazon (AMZN), and the remainder in Alphabet can be calculated by multiplying the weight of each stock by its average monthly return and summing up these values.

1. Calculate the average monthly return for each stock (Apple, Amazon, Alphabet) as described above.
2. Multiply the average monthly return of each stock by its weight (10% for Apple, 20% for Amazon, and the remainder for Alphabet).
3. Sum up the resulting values to get the arithmetic average monthly return for the portfolio.

To calculate the standard deviation of the portfolio, you need to know the monthly returns of each stock in the portfolio and their respective weights.

1. Calculate the standard deviation of the monthly returns for each stock using the formula: Standard Deviation = SQRT(SUM((Monthly Return - Average Monthly Return)^2) / (n - 1)), where n is the number of months.
2. Multiply the standard deviation of each stock by its weight (10% for Apple, 20% for Amazon, and the remainder for Alphabet).
3. Sum up the resulting values to get the standard deviation of the portfolio.