Calculate the historical average return

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1)DATA COLLECTING AND HANDLING a) Download one year of daily prices (1/1/2014 to 12/31/2014) for the following four stocks: MICROSOFT , PFIZER, WALMART, BANK OF AMERICA.

2)BASIC STOCK ANALYSIS a) For each stock calculate the historical average return, the volatility, both on a daily base and annualized, and the correlation amongst the four stocks. Explain how you calculate them. b) What is your first assessment about the four stocks? Discuss briefly the above figures. c) Calculate the Sharpe Ratio of each stock. Explain how you calculate them. d) How do you interpret this number? Can you relate it with the volatility of the stock?

3) 3) BASIC PORTFOLIO ANALYSIS a) Calculate the historical average return and the volatility of an equally weighted portfolio. Compare them with the figures of the four stocks. b) Calculate the Sharpe Ratio of the equally weighted portfolio. How do you interpret this number? Compare it with the Sharpe Ratio of the stocks.

Reference no: EM13706788

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