Fill in the spreadsheet below to calculate the portfolio return and risk between Zenon and Dynamics, given the 10 years of annual returns for each stock and portfolio weights of 50/50.
a. How would your answer change if the weights were 40 percent for Zenon and 60 percent for Dynamics?
b. How would your answer change if the weights were 30 percent for Zenon and 70 percent for Dynamics?
Zenon Dynamics
Expected return
Variance
Standard deviation
Covariance
Weight for Zenon 50%
Weight for Dynamics 50%
Expected portfolio return
Portfolio variance
Portfolio standard deviation
Zenon Dynamics
Zenon return (%) Dynam return (%)
9.89 –47.67 2014
–12.34 30.79 2013
13.56 24.78 2012
34.56 7.89 2011
–15.23 24.42 2010
20.09 34.56 2009
7.56 67.56 2008
16.47 44.67 2007
18.34 78.56 2006
15.56 51.00 2005
Jones, Charles P.; Jensen, Gerald R.. Investments: Analysis and Management, 13th Edition (Page 196). Wiley. Kindle Edition.