Risk and Return

For Tasks 1–8, you are going to calculate expected returns based on the past stock price information, standard deviations of the returns, and betas of each stock. Once you have calculated expected returns, you are going to graph a security market line, which is a graphical representation of risk and return.

For Tasks 9–16, you are going to compose a portfolio of two stocks, NFLX and AMD. You want to have the biggest return possible with the smallest risk for the portfolio. You are going to calculate the expected return on the portfolio, the standard deviation, and the Sharpe ratio so that you can use Solver to find the optimal portfolio.