AXP HD BNS SBUX

-0.13894 -0.13354 0.01052 -0.04914

0.03368 0.06297 -0.05790 -0.02671
0.10255 0.02983 0.05391 -0.07279
-0.03482 -0.04988 0.04885 0.12098
-0.18728 -0.13717 -0.07364 -0.13490
-0.01022 0.01766 0.06344 -0.06636
0.06875 0.13790 -0.05594 0.05899
-0.10712 -0.03729 0.00079 -0.04430
-0.21985 -0.08891 -0.26382 -0.11728
-0.15220 -0.02029 -0.17189 -0.31981
-0.20430 0.00690 -0.02063 0.05965
-0.09048 -0.06464 -0.10487 -0.00221
-0.27907 -0.02984 -0.06176 -0.03097
0.12993 0.14193 0.08882 0.21461
0.87550 0.11720 0.17850 0.30169
-0.01438 -0.12014 0.23249 -0.00505
-0.05792 0.02981 0.06905 -0.03483
0.21903 0.09757 0.15173 0.27444
0.19387 0.05232 -0.01798 0.07316
0.00751 -0.01576 0.08689 0.08741
0.02795 -0.05832 -0.07391 -0.08089
0.20060 0.09071 0.10423 0.15347
-0.03145 0.06597 0.02335 0.05293
-0.06651 -0.03188 -0.09945 -0.05480
0.01419 0.11391 0.07922 0.05127
0.08507 0.04452 0.10109 0.05925
0.11786 0.08924 0.02761 0.07487
-0.13552 -0.03883 -0.10310 -0.00320
0.00000 -0.16539 0.00779 -0.06145
0.12457 0.01563 0.10053 0.02268
-0.10682 -0.01576 -0.03887 -0.07071
0.05419 0.13877 0.10624 0.11211
-0.00890 -0.02477 0.01301 0.11781
0.04239 -0.01476 -0.02915 0.07606
-0.00694 0.16063 0.11046 0.04981
0.01494 0.04893 -0.01021 -0.01860
0.00427 0.01889 0.09247 0.05031
0.03734 -0.00421 -0.00735 0.12006
0.09023 0.00254 0.00300 -0.02027
0.05141 -0.02335 0.00474 0.02012
0.00557 0.00576 -0.01014 0.07335
-0.03202 -0.03552 -0.05669 0.01501
-0.00674 -0.03742 -0.01666 -0.03315
-0.09663 -0.01512 -0.09254 -0.03429
0.13200 0.08897 0.04910 0.13576
-0.05107 0.10414 -0.04260 0.03054
-0.01801 0.07191 -0.00084 0.05811
0.06688 0.05591 0.03032 0.04146
 0.05480 0.07159 0.05073 0.01694
0.09394 0.06423 0.04944 0.15098
0.04434 0.02927 -0.01031 0.02660
-0.07283 -0.04158 -0.07940 -0.04036
0.04271 0.07387 0.02505 -0.02865 0.487866
-0.00521 -0.01524 0.00768 -0.15069
0.01012 0.09327 0.01623 0.09973
-0.02470 0.06372 0.04464 0.02227
-0.01204 0.01664 -0.00810 -0.09485
-0.00125 0.06498 0.02507 0.13476
0.02818 -0.04949 0.04855 0.03393
0.05098 0.02215 0.01037 0.03711

Mean Return 0.01420 0.01735 0.01014 0.02387

Variance 0.02224 0.00513 0.00656 0.00992
Standard Deviation 0.14911 0.07164 0.08098 0.09961

AXP HD BNS SBUX

AXP 0.0222352543
HD 0.0052120058 0.0051329354
BNS 0.0069293201 0.002275223 0.0065570788
SBUX 0.0093481773 0.0039212337 0.0048037517 0.0099215069

Option 1
Equal Weights Sharpe Ratio 2.409612137
Expected Return 0.0163893081
Portfolio Variance 0.0068016374

Option 2
Expected Return 0.0174780458 Sharpe Ratio 2.8981948041
Portfolio Variance 0.0060306663

Option 3
Expected Return 0.016896877 Sharpe Ratio 3.4062014394
Portfolio Variance 0.0049606218
An investor has $100,000 to invest in the stock market. She is interested in
Developing a stock portfolio made up of stocks on the New York Stock Exchange
(NYSE), the Toronto Stock Exchange (TSX), and the NASDAQ. The stocks are
American Express (AXP) and Home Depot (HD) (NYSE), Bank of Nova Scotia
(BNS) (TSX) and Starbucks (SBUX) (NASDAQ). However, she doesn’t know how
much to invest in each one. She wants to maximize her return, but she would also like
to minimize the risk. She has computed the monthly returns for all four stocks during
a 60-month period (January 2008 to December 2012) Xm07-00. She narrowed her
choices down to the following three. What should she do?
1. $25,000 in each stock
2. American Express: $10,000, Home Depot: $20,000, Bank of Nova Scotia: $30,000,
Starbucks: $40,000
3. American Express: $10,000, Home Depot: $50,000, Bank of Nova Scotia: $20,000,
Starbucks: $20,000