finance-Katherine Wilson is wondering how much she must undertake to generate

QUESTION

1. Katherine Wilson is wondering how much she must undertake to generate an acceptable return on her portfolio. The risk-free return currently is 6%. The return on average stock (market return) is 14%. Use the CAMP to calculate the beta coefficient associated with a portfolio return of 20%how can you calculate this using excel? Solve using excel2. Jamie Wong is considering building an investment portfolio containing two stocks, L and M. Stock L will represent 65% of dollar value of the portfolio, and stock M will account for the other 35%. The expected returns over the next 6 years, 2015-2020, for each of the stocks are shown in the following table. Solve using excelformulasyearExpected returnExpected returnYearStock LStock M201515%23%201615%23%501717%23%201817%23%201917%23%202017%23%a. Calculate the expected portfolio return, for each of the 6 years.b. Calculate the expected value of portfolio returns, over the 6-years period.c. Calculate the standard deviation of expected portfolio returns, over the 6-year period.d. How would you characterize the correlation of returns of the two stocks L and M?

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