Finance Academic Essay - Write My Academic Essay

1.Select three US companies in different industries and three foreign companies. Each foreign company must be from one of the industries represented by the US companies so all three industries are represented in both the US and foreign sample. The three foreign companies must be located in different foreign countries. One foreign company must be a country other than Canada, England, Germany, France, Japan and China. All companies must have prices available continuously for the last nine years.

For each company, calculate (a) the monthly returns for each month in the nine year period, (b) the average monthly return on the company’s stock and (c) the standard deviation of the nine years of monthly returns on the company’s stock.

For an equally weighted portfolio of the three US companies, calculate (a) the monthly portfolio return each month in the nine year period, (b) the average monthly portfolio return for the nine year period and (c) the standard deviation of the nine years of monthly returns on the portfolio.

For an equally weighted portfolio of all six companies, calculate (a) the monthly portfolio return each month in the nine year period, (b) the average monthly portfolio return for the nine year period and (c) the standard deviation of the nine years of monthly returns on the portfolio.

Contrast the risk of the US portfolio and the global portfolio. Explain the reason for your findings.

Select a return that is greater than the returns from 4(b) and less than the highest returns from 3(b).
Use the solver in excel to determine what percentage of funds should be invested in each US stock to provide the lowest risk domestic portfolio that has the return selected in part a.

Use the solver in excel to determine what percentage of funds should be invested in each US and foreign stock that to provide the lowest risk domestic portfolio that has the return selected in 7(a).