Optimizing Portfolio Investment Strategies

This assignment involves analyzing the performance of a given portfolio with an average return rate of -4.6% to 12.54%. It uses Excel's NORM.S.DIST function to determine the typical regular annual return distribution, focusing on the C.V. and assessing potential risks. The goal is to identify standard deviation and invest accordingly in investments that provide a good outcome and competitiveness.

Analysis of Portfolio and Investment
Nikita Karki
Westcliff University
BUS 550 Financial Management
Dr. Kambiz Moghaddam/ Madhu Pokharel
December 21, 2020
1

Abstract
In CLA2, it includes a realistic understanding about what portfolio management entails
and how can an investor evaluates return and risk and make investments appropriately in
inventories. I selected Netflix, Walmart, Apple, Toyota Motors and Coca cola because we
are required to expand our stock, because they existed in various industries. We measured their
yields, variance, deviation and focused on investing factors as I selected Toyota for the most
investment because it had the lowest default and Netflix the lowest, given the highest default.
The Portfolio evaluation was also carried out on the basis of return, standard deviation and
variance calculated by assuming 10 percent loss and 99 percent guarantee with promising
outcomes, with market capitalization graphs that reflect the options also calculated for different
weights.
Keywords: portfolio, standard deviation, mean, rate, return
2

Analysis of Portfolio and Investment
The portfolio can be described as the distribution and identification of all capital assets,
such as market stocks, bonds and personal investment to determine benefit in accordance with
other securities and also the macro environment. Portfolio management includes 3 essential parts
for balance of transition and preserving profitability: determining, prioritizing and managing
stocks (Martinsu & Lehtonen, 2007). Portfolio management's main purpose is to reduce risk and
generate the returns that every investor desires and can be accomplished by making an
investment in related bonds and secure investment. Since the key strategy to remain secure,
many investors make investments in different sectors whether any of the sector tends to
breakdown.
Netflix (NFLX), Apple (AAP), Coca-Cola (COKE), Walmart (WMT) and Toyota
Motors (TM) are 5 sectors that I have selected for my assignment, because Netflix has an online
entertainment platform, Apple is technical industry, Coca-Cola is a beverage industry, Walmart
is a retail industry and Toyota is an automotive industry. I am searching for 5 different stocks.
The entry requirements for the respective inventories are below;
Netflix (NFLX) is an online entertainment and streaming application and website that
operates on the basis of the subscriptions; originally it was only intended for streaming certain
movies, but because of its variation, the generation was simple to use and to charge for usage, the
generation binged on Netflix.
More than 95 percent of the total population knows coke and its product line, Coca- cola
(COKE) is among the products most valued in the market for their business because of their
specific value for the company as it has been on the market for decades. In one of the interviews
he spent in coke, as being the top owners of the portfolio, Warren Buffet said that since he had
3

become a coke beverage and collector, he became personally attached to the business (Gardner,
McGowan Jr, & Moeller, 2010). The brand loyalty yet gained great value from him as coca cola
has took over the industry over many years. So, stability and development is all I need in my
portfolio, to boost productivity and make sustainable benefit. I have selected Coca-Cola as the
leading brand in the industry in the past few decades.
Toyota Motors (TM), is known as the world's best auto manufacturer company with
headquarters in Japan, has been in stock and has been very successful in past few decades for
performance. This is because someone in the production team will interrupt the production
process if they do not think the car is better enough, and it has maintained a car industry that is
acceptable to the public. I selected Toyota in my portfolio for diversifying, and I wanted an
automotive sector that would have strong returns and reducing the severity, which could allow
my portfolio will become less volatile and competitive. Based at the historical values, the table
below shows Toyota's exponential change in the market. In addition to all requirements for
selecting the stocks of Netflix, Apple, Coca Cola, Walmart and Toyota motors are discussed in
the context for diversifying the portfolios, personal opinions and positive earnings.
Apple Inc. is the company that designs, produces and distributes smartphones, laptops,
wearable tech and accessories. The company also provides multiple services. Apple, Air
Pods, Home Pod, Beats iPod touch, and Apple licensed, third-party devices are offered by the
Company as iPhone, a phone section; Mac, an individual device line; iPad; many wearable tech,
computer and accessories. The company offers services for AppleCare, Cloud Store, and
operates different App Stores to enable customers to access and install apps and entertainment
platforms like games, books, podcasts and music. The Apple Inc. also distributes its products via
4

online and retail shops and sells directly, and third-party cellular network carriers, suppliers,
retailers and vendors (Roon, Nijman, & Werker, 2003).
Walmart is an irresistible shopping force which has yet to reach any opposing force. It is
also the world's first retailer and the world's biggest sales business with a workforce of 2.2
million. Walmart offers foodstuffs and services, running 5,400 US outlets, with about 4,800
Walmart stores. Walmart does have an international division of approximately 6,000 sites; is
one of the number 1 retailer in Canada and Mexico, operates through regional branches,
functioning in Africa, Latin America, Asia and Europe. Every week, around 265 million people
visit Walmart stores and websites.
The table below shows the adjusted monthly closing prices and the return rate of the
Netflix, Coca-Cola, Walmart, Apple and Toyota engines including the estimated return on the
portfolio are computed on the basis of the portfolio information given below.
Table 1
Netflix Apple Inc. Walmart Coke
Toyota Motor
Co. Ltd. NYSE
Date
Adj
Close
Retur
n
Adj
Close
Retur
n
Adj
Close
Retur
n Adj Close
Retur
n Adj Close
Retur
n Adj Close
Marke
t
Retur
n on
Index
1/1/00 1.3
0.8
0
37.3
4 36.891979 0 56.72797 0%
6574.00976
6 0%
2/1/00 1.62
-11%
0.88
10.48
% 33.25
-
10.96
% 36.687531
-
0.55% 52.867542 -7%
6266.41992
2 -5%
3/1/00 1.77 16% 1.05
18.48
% 38.53
15.90
% 38.677509 5.42% 67.618423 28%
6848.60986
3 9%
5

4/1/00 1.89 -2% 0.96
-
8.65% 37.81
-
1.87% 37.261917
-
3.66% 65.115356 -4%
6811.16992
2 -1%
5/1/00 2
4%
0.65
-
32.29
% 39.35 4.06% 35.618011
-
4.41% 59.536362 -9% 6805.25 0%
6/1/00 2.12 0% 0.81
24.70
% 39.35 0.00% 33.410534
-
6.20% 60.717285 2%
6798.16992
2 0%
7/1/00 2.3 -4% 0.78
-
2.98% 37.77
-
4.02% 32.309086
-
3.30% 55.138313 -9%
6773.85009
8 0%
8/1/00 2.4
-14%
0.94
19.93
% 32.56
-
13.80
% 29.417778
-
8.95% 56.848682 3%
7132.29980
5 5%
9/1/00 2.45
1%
0.40
-
57.74
% 32.90 1.05% 30.988274 5.34% 51.147511 -10%
7010.81005
9 -2%
10/1/0
0 2.5
-6%
0.30
-
24.03
% 31.05
-
5.61% 26.600962
-
14.16
% 52.324055 2%
7042.31982
4 0%
11/1/0
0 2.56
15%
0.25
-
15.65
% 35.72
15.01
% 25.215502
-
5.21% 46.525513 -11%
6659.12011
7 -5%
12/1/0
0 2.6 2% 0.23
-
9.85% 36.36 1.80% 28.192682
11.81
% 41.105686 -12%
6945.56982
4 4%
1/1/01 2.62 7% 0.33
45.38
% 38.92 7.05% 30.379232 7.76% 44.475113 8%
7017.14990
2 1%
2/1/01 2.66
-12%
0.28
-
15.61
% 34.32
-
11.81
% 29.030096
-
4.44% 45.448086 2%
6629.08984
4 -6%
3/1/01 2.67 1% 0.34
20.93
% 34.60 0.82% 30.28676 4.33% 46.199005 2%
6298.35009
8 -5%
4/1/01 2.7 3% 0.39
15.50
% 35.51 2.61% 29.741903
-
1.80% 44.326443 -4% 6712.52002 7%
5/1/01 2.89
0%
0.31
-
21.73
% 35.51 0.02% 30.191292 1.51% 46.64389 5%
6784.85009
8 1%
6/1/01 2.9 -6% 0.36
16.54
% 33.49
-
5.70% 29.655142
-
1.78% 46.120171 -1%
6574.31982
4 -3%
7/1/01 2.98
15%
0.29
-
19.18
% 38.42
14.71
% 27.891653
-
5.95% 43.403378 -6%
6523.35986
3 -1%
8/1/01 3
-14%
0.29
-
1.28% 33.02
-
14.04
% 30.408773 9.02% 39.999191 -8%
6215.66015
6 -5%
6

9/1/01 3.01
3%
0.24
-
16.39
% 34.02 3.02% 28.632313
-
5.84% 33.943676 -15%
5750.41992
2 -7%
10/1/0
1 3.06 4% 0.27
13.22
% 35.38 4.00% 29.011551 1.32% 32.323086 -5%
5776.85009
8 0%
11/1/0
1 3.33 7% 0.33
21.30
% 37.96 7.30% 28.139305
-
3.01% 34.096916 5%
6125.04003
9 6%
12/1/0
1 3.38 4% 0.34 2.82% 39.61 4.35% 28.905918 2.72% 33.479355 -2%
6236.39013
7 2%
1/1/02 3.4 4% 0.38
12.88
% 41.33 4.35% 32.066795
10.94
% 34.399113 3%
6116.89990
2 -2%
2/1/02 3.44
3%
0.33
-
12.22
% 42.73 3.38% 33.784649 5.36% 33.80127 -2%
6117.95996
1 0%
3/1/02 3.46 -1% 0.37 9.08% 42.24
-
1.15% 37.624153
11.36
% 38.202991 13%
6348.79003
9 4%
4/1/02 3.48 -9% 0.37 2.53% 38.54
-
8.77% 37.747009 0.33% 36.158195 -5%
6071.22021
5 -4%
5/1/02 3.49 -3% 0.36
-
4.00% 37.33
-
3.15% 37.961998 0.57% 36.514294 1% 6035.27002 -1%
6/1/02 3.5
2%
0.27
-
23.95
% 37.95 1.68% 33.187317
-
12.58
% 34.95137 -4%
5636.54003
9 -7%
7/1/02 3.51
-10%
0.24
-
13.88
% 33.98
-
10.48
% 36.814754
10.93
% 31.634289 -9%
5195.60986
3 -8%
8/1/02 3.52 9% 0.23
-
3.34% 36.95 8.74% 37.324146 1.38% 32.999374 4%
5239.81005
9 1%
9/1/02 3.53 -8% 0.22
-
1.70% 34.02
-
7.93% 36.405628
-
2.46% 33.698395 2%
4709.95996
1 -10%
10/1/0
2 3.54 9% 0.25
10.83
% 37.05 8.90% 41.358047
13.60
% 32.18856 -4%
5000.31982
4 6%
11/1/0
2 3.55 1% 0.24
-
3.55% 37.29 0.65% 44.424194 7.41% 35.036522 9%
5236.85009
8 5%
12/1/0
2 3.56 -6% 0.22
-
7.55% 34.94
-
6.29% 50.300129
13.23
% 35.102745 0% 5000 -5%
1/1/03 3.57 -5% 0.22 0.21% 33.12
-
5.23% 53.169525 5.70% 31.658703 -10%
4868.68017
6 -3%
2/1/03 3.58
1%
0.23 4.53% 33.30 0.54% 46.32354
-
12.88
% 31.446772 -1%
4716.06982
4 -3%
3/1/03 3.59 8% - 36.05 8.26% 39.061947 - 29.771107 -5% 4730.20996 0%
7

0.22 5.80%
15.68
% 1
4/1/03 3.6 8% 0.22 0.57% 39.09 8.43% 39.719494 1.68% 30.180204 1%
5131.56005
9 8%
5/1/03 3.61 -7% 0.28
26.23
% 36.51
-
6.59% 39.281136
-
1.10% 31.77986 5%
5435.37011
7 6%
6/1/03 3.62 2% 0.29 6.18% 37.25 2.01% 42.950878 9.34% 34.52594 9%
5505.16992
2 1%
7/1/03 3.63 4% 0.33
10.60
% 38.87 4.34% 43.776863 1.92% 34.192684 -1%
5558.99023
4 1%
8/1/03 3.64 6% 0.35 7.26% 41.13 5.83% 40.040295
-
8.54% 36.918755 8%
5660.16015
6 2%
9/1/03 3.65 -6% 0.32
-
8.36% 38.82
-
5.61% 39.583145
-
1.14% 39.691509 8%
5644.02978
5 0%
10/1/0
3 3.666 6% 0.35
10.47
% 40.98 5.55% 39.923084 0.86% 38.880852 -2%
5959.00976
6 6%
11/1/0
3 3.678 -5% 0.32
-
8.65% 38.74
-
5.47% 42.342186 6.06% 39.91954 3% 6073.02002 2%
12/1/0
3 3.71 -5% 0.33 2.20% 36.94
-
4.65% 41.987865
-
0.84% 46.071335 15% 6464 6%
1/1/04 3.726 2% 0.35 5.57% 37.56 1.69% 40.319805
-
3.97% 44.496525 -3%
6551.62988
3 1%
2/1/04 3.73 11% 0.37 6.03% 41.54
10.60
% 41.304745 2.44% 46.325966 4%
6692.37011
7 2%
3/1/04 3.74 0% 0.42
13.04
% 41.63 0.22% 40.7528
-
1.34% 49.924553 8%
6599.06005
9 -1%
4/1/04 3.747 -4% 0.40
-
4.66% 39.84
-
4.29% 42.245628 3.66% 49.358135 -1%
6439.41992
2 -2%
5/1/04 3.748 -2% 0.43 8.84% 38.96
-
2.23% 44.36108 5.01% 48.778328 -1%
6484.72021
5 1%
6/1/04
3.748
2 -6% 0.50
15.97
% 36.79
-
5.57% 46.333763 4.45% 55.028168 13%
6602.99023
4 2%
7/1/04
3.748
3 1% 0.50
-
0.61% 37.14 0.97% 45.467571
-
1.87% 53.935959 -2%
6403.14990
2 -3%
8/1/04
3.748
5 -1% 0.53 6.65% 36.90
-
0.64% 45.178837
-
0.64% 53.389866 -1%
6454.22021
5 1%
9/1/04
3.748
6 1% 0.60
12.35
% 37.36 1.25% 43.529343
-
3.65% 51.495361 -4% 6570.25 2%
10/1/0
4 3.749 1% 0.81
35.23
% 37.87 1.35% 42.594612
-
2.15% 52.626842 2%
6692.70996
1 2%
8

11/1/0
4 3.75 -3% 1.03
27.96
% 36.56
-
3.45% 42.240055
-
0.83% 50.673416 -4%
7005.72021
5 5%
12/1/0
4 3.76 1% 0.99
-
3.95% 37.10 1.46% 46.191463 9.35% 55.529816 10%
7250.06005
9 3%
1/1/05 3.771 -1% 1.19
19.41
% 36.89
-
0.55% 43.381931
-
6.08% 53.033813 -4%
7089.83007
8 -2%
2/1/05 3.772 -2% 1.38
16.67
% 36.34
-
1.51% 43.414307 0.07% 52.755714 -1% 7321.22998 3%
3/1/05 3.773 -3% 1.29
-
7.11% 35.28
-
2.91% 42.54744
-
2.00% 50.449589 -4%
7167.52978
5 -2%
4/1/05 3.775
-6%
1.11
-
13.46
% 33.29
-
5.65% 38.814049
-
8.77% 49.635555 -2%
7008.31982
4 -2%
5/1/05 3.777 0% 1.23
10.26
% 33.35 0.19% 39.448494 1.63% 48.952904 -1%
7134.33007
8 2%
6/1/05 3.781 2% 1.14
-
7.42% 34.14 2.38% 41.306656 4.71% 48.802723 0%
7217.77978
5 1%
7/1/05 3.782 2% 1.32
15.87
% 34.96 2.39% 42.998486 4.10% 51.785908 6%
7476.66015
6 4%
8/1/05 3.783 -9% 1.45 9.94% 31.85
-
8.90% 39.96629
-
7.05% 55.963734 8%
7496.08984
4 0%
9/1/05 3.784 -2% 1.65
14.33
% 31.14
-
2.23% 40.195671 0.57% 63.056484 13% 7632.97998 2%
10/1/0
5 3.785 8% 1.78 7.42% 33.62 7.96% 37.460651
-
6.80% 63.874668 1%
7433.12011
7 -3%
11/1/0
5 3.787 3% 2.09
17.76
% 34.51 2.64% 37.78096 0.86% 66.586296 4%
7645.27978
5 3%
12/1/0
5 3.788 -4% 2.22 6.00% 33.26
-
3.62% 35.512421
-
6.00% 72.002663 8%
7753.95019
5 1%
1/1/06 3.789 -1% 2.33 5.04% 32.87
-
1.17% 37.122852 4.53% 71.376358 -1%
8106.54980
5 5%
2/1/06 3.79 -2% 2.11
-
9.30% 32.33
-
1.63% 37.354103 0.62% 73.551193 3%
8060.60986
3 -1%
3/1/06 3.791 4% 1.94
-
8.42% 33.67 4.14% 38.195904 2.25% 74.948326 2%
8233.20019
5 2%
4/1/06 3.792 -4% 2.17
12.23
% 32.22
-
4.33% 40.022682 4.78% 81.314186 8%
8471.42968
8 3%
5/1/06 3.793
8%
1.84
-
15.09
% 34.66 7.59% 40.562397 1.35% 74.545502 -8%
8189.10986
3 -3%
9

6/1/06 3.794 0% 1.77
-
4.18% 34.58
-
0.23% 42.377186 4.47% 72.608627 -3%
8169.06982
4 0%
7/1/06 3.795 -8% 2.10
18.67
% 31.95
-
7.62% 51.191513
20.80
% 73.045998 1%
8242.12011
7 1%
8/1/06 3.796 0% 2.09
-
0.16% 32.11 0.49% 48.912796
-
4.45% 75.21196 3% 8388.55957 2%
9/1/06 3.797 11% 2.38
13.46
% 35.54
10.70
% 51.962757 6.24% 75.600739 1%
8469.65039
1 1%
10/1/0
6 3.798 0% 2.50 5.33% 35.51
-
0.08% 52.801147 1.61% 82.574348 9%
8774.98046
9 4%
11/1/0
6 3.81 -6% 2.83
13.05
% 33.22
-
6.45% 52.92691 0.24% 84.008896 2% 8969 2%
12/1/0
6 3.822 0% 2.62
-
7.44% 33.28 0.17% 57.607452 8.84% 93.987816 12%
9139.01953
1 2%
1/1/07 3.84 4% 2.65 1.05% 34.49 3.65% 52.817368
-
8.32% 92.217346 -2%
9254.73046
9 1%
2/1/07 3.85 1% 2.61
-
1.31% 34.94 1.30% 49.273193
-
6.71% 93.490944 1%
9124.54003
9 -1%
3/1/07 3.866 -3% 2.87 9.81% 33.96
-
2.82% 47.880993
-
2.83% 89.684143 -4%
9261.82031
3 2%
4/1/07 3.867 3% 3.08 7.42% 34.83 2.55% 46.688858
-
2.49% 85.654068 -4%
9627.73046
9 4%
5/1/07 3.868 -1% 3.74
21.43
% 34.59
-
0.67% 46.807198 0.25% 85.188469 -1%
9978.63964
8 4%
6/1/07 3.869 2% 3.77 0.70% 35.13 1.54% 42.724464
-
8.72% 88.800316 4%
9873.01953
1 -1%
7/1/07 3.87 -4% 4.07 7.96% 33.55
-
4.49% 44.261871 3.60% 85.096756 -4% 9554.5 -3%
8/1/07 3.871 -5% 4.27 5.10% 31.86
-
5.05% 49.833878
12.59
% 81.604866 -4%
9596.98046
9 0%
9/1/07 3.872 1% 4.74
10.82
% 32.03 0.55% 51.467567 3.28% 82.437271 1%
10039.2802
7 5%
10/1/0
7 3.873 4% 5.86
23.77
% 33.18 3.57% 50.357979
-
2.16% 81.576668 -1%
10311.6103
5 3%
11/1/0
7 3.876 6% 5.62
-
4.07% 35.15 5.95% 48.429024
-
3.83% 80.158127 -2%
9856.84960
9 -4%
12/1/0
7 3.877 -1% 6.11 8.70% 34.88
-
0.77% 50.473122 4.22% 75.681519 -6%
9740.32031
3 -1%
1/1/08 3.879 7% 4.18
-
31.66 37.40 7.23% 51.484631 2.00% 77.214134 2%
9126.16015
6 -6%
10

%
2/1/08 3.88 -2% 3.86
-
7.64% 36.55
-
2.27% 46.881359
-
8.94% 77.378059 0%
8962.45996
1 -2%
3/1/08 3.89 6% 4.43
14.78
% 38.83 6.23% 53.040703
13.14
% 71.917778 -7%
8797.29003
9 -2%
4/1/08 3.9 11% 5.37
21.22
% 42.94
10.58
% 49.253326
-
7.14% 73.346306 2%
9299.59960
9 6%
5/1/08 3.91 0% 5.83 8.51% 42.76
-
0.41% 44.519081
-
9.61% 73.743752 1%
9401.08007
8 1%
6/1/08 3.967
-2%
5.17
-
11.29
% 41.80
-
2.26% 31.970095
-
28.19
% 67.926659 -8%
8660.48046
9 -8%
7/1/08 3.97 4% 4.91
-
5.07% 43.60 4.31% 29.073935
-
9.06% 62.18177 -8%
8438.63964
8 -3%
8/1/08 4 1% 5.23 6.66% 43.93 0.77% 35.08239
20.67
% 64.739876 4%
8382.08007
8 -1%
9/1/08 4.2
2%
3.51
-
32.96
% 44.72 1.80% 38.02446 8.39% 62.001152 -4%
7532.79980
5 -10%
10/1/0
8 4.28 -7% 3.32
-
5.34% 41.67
-
6.81% 38.477333 1.19% 55.77879 -10%
6061.08984
4 -20%
11/1/0
8 4.33
0%
2.86
-
13.87
% 41.73 0.13% 37.066452
-
3.67% 46.256298 -17%
5599.29980
5 -8%
12/1/0
8 4.45 0% 2.63
-
7.90% 41.86 0.32% 40.265938 8.63% 47.971684 4%
5757.04980
5 3%
1/1/09 4.49
-16%
2.78 5.60% 35.34
-
15.58
% 39.381096
-
2.20% 46.556862 -3%
5195.79003
9 -10%
2/1/09 4.5 4% 2.76
-
0.91% 36.93 4.50% 38.329754
-
2.67% 46.285625 -1%
4617.02978
5 -11%
3/1/09 4.56 6% 3.24
17.70
% 39.07 5.81% 45.856209
19.64
% 46.402916 0% 4978.97998 8%
4/1/09 4.66 -3% 3.88
19.70
% 38.01
-
2.72% 45.917877 0.13% 58.674614 26%
5513.35986
3 11%
5/1/09 4.68 -1% 4.19 7.93% 37.51
-
1.31% 42.975327
-
6.41% 59.408421 1%
6004.06982
4 9%
6/1/09 4.7 -2% 4.40 4.87% 36.73
-
2.09% 48.819233
13.60
% 55.984001 -6%
5905.14990
2 -2%
7/1/09 4.78 3% 5.04
14.72
% 37.82 2.97% 50.050121 2.52% 62.395519 11%
6424.27978
5 9%
11

8/1/09 4.89 2% 5.19 2.95% 38.57 1.98% 47.871719
-
4.35% 63.144142 1%
6643.24023
4 3%
9/1/09 5
-3%
5.72
10.19
% 37.43
-
2.97% 43.079411
-
10.01
% 58.237301 -8%
6910.87988
3 4%
10/1/0
9 5.16 1% 5.82 1.70% 37.88 1.20% 39.948299
-
7.27% 59.30825 2%
6739.45019
5 -2%
11/1/0
9 5.18 10% 6.17 6.05% 41.59 9.80% 42.109837 5.41% 59.045147 0%
7092.35986
3 5%
12/1/0
9 6.13 -2% 6.50 5.41% 40.75
-
2.02% 48.325844
14.76
% 63.270168 7%
7184.95996
1 1%
1/1/10 6.47 0% 5.93
-
8.86% 40.94 0.47% 45.150036
-
6.57% 57.887394 -9%
6883.77978
5 -4%
2/1/10 5.63 1% 6.32 6.54% 41.43 1.20% 49.784039
10.26
% 56.256016 -3%
7035.04003
9 2%
3/1/10 5.91 3% 7.25
14.85
% 42.60 2.83% 52.739239 5.94% 60.458492 7%
7447.79980
5 6%
4/1/10 6.28 -3% 8.06
11.10
% 41.33
-
2.98% 49.520573
-
6.10% 58.976868 -2%
7474.39990
2 0%
5/1/10 6.23 -6% 7.93
-
1.61% 38.96
-
5.74% 44.737545
-
9.66% 55.342937 -6%
6791.56982
4 -9%
6/1/10 6.6 -4% 7.76
-
2.08% 37.25
-
4.37% 43.279095
-
3.26% 52.458748 -5%
6469.64990
2 -5%
7/1/10 7.64 6% 7.94 2.27% 39.67 6.49% 46.602692 7.68% 53.728714 2%
6998.99023
4 8%
8/1/10 8.38 -2% 7.50
-
5.50% 38.86
-
2.05% 44.913795
-
3.62% 51.900265 -3%
6704.14990
2 -4%
9/1/10 7.87 7% 8.76
16.72
% 41.72 7.36% 48.038727 6.96% 54.76152 6%
7281.06982
4 9%
10/1/1
0 8.89 1% 9.29 6.07% 42.23 1.21% 48.392689 0.74% 54.625507 0%
7513.35009
8 3%
11/1/1
0 9.44 0% 9.60 3.38% 42.16
-
0.15% 53.094002 9.71% 59.924553 10%
7430.93994
1 -1%
12/1/1
0 10.53 0% 9.95 3.67% 42.04
-
0.30% 50.674397
-
4.56% 60.649609 1% 7964.02002 7%
1/1/11 14.13 5% 10.47 5.20% 43.95 4.54% 49.252079
-
2.81% 63.387821 5%
8139.16015
6 2%
2/1/11 15.88 -7% 10.90 4.09% 40.74
-
7.29% 52.607273 6.81% 71.964996 14%
8438.54980
5 4%
12

3/1/11 15.52 0% 10.76
-
1.33% 40.80 0.13% 61.218987
16.37
% 61.899147 -14%
8404.98046
9 0%
4/1/11 14.65 6% 10.81 0.46% 43.40 6.37% 64.525368 5.40% 62.033291 0%
8671.41015
6 3%
5/1/11 17.93 0% 10.73
-
0.66% 43.59 0.44% 61.814327
-
4.20% 64.843788 5%
8477.28027
3 -2%
6/1/11 23.17 -3% 10.36
-
3.50% 42.22
-
3.13% 62.196918 0.62% 64.166458 -1%
8319.09960
9 -2%
7/1/11 24.8 -1% 12.05
16.33
% 41.88
-
0.81% 59.310444
-
4.64% 63.777191 -1%
8079.43994
1 -3%
8/1/11
29.41 1%
11.88
-
1.45% 42.26 0.91% 51.478378
-
13.21
% 55.929619 -12%
7528.39013
7 -7%
9/1/11 25.1 -2% 11.77
-
0.91% 41.53
-
1.72% 51.184448
-
0.57% 53.142475 -5%
6791.64990
2 -10%
10/1/1
1 30.58 9% 12.49 6.15% 45.39 9.29% 51.793571 1.19% 52.325294 -2%
7563.37988
3 11%
11/1/1
1 29.52 4% 11.80
-
5.58% 47.14 3.84% 51.682823
-
0.21% 51.6978 -1% 7484.5 -1%
12/1/1
1 33.97 1% 12.50 5.97% 47.83 1.46% 54.276836 5.02% 51.870354 0%
7477.02978
5 0%
1/1/12 33.24 3% 14.09
12.71
% 49.41 3.32% 56.548019 4.18% 57.635487 11% 7838.47998 5%
2/1/12 38.69 -4% 16.74
18.83
% 47.58
-
3.72% 59.736961 5.64% 64.875214 13%
8113.24023
4 4%
3/1/12 37.53 4% 18.50
10.53
% 49.28 3.59% 58.400372
-
2.24% 68.098976 5%
8206.92968
8 1%
4/1/12 38 -3% 18.02
-
2.60% 47.76
-
3.10% 59.712837 2.25% 64.682671 -5%
8119.06005
9 -1%
5/1/12 33.57 12% 17.83
-
1.07% 53.36
11.73
% 57.032059
-
4.49% 60.815006 -6%
7463.95996
1 -8%
6/1/12 16.18 7% 18.02 1.09% 56.90 6.64% 60.072578 5.33% 63.654446 5%
7801.83984
4 5%
7/1/12 11.73 7% 18.85 4.58% 60.75 6.76% 62.773403 4.50% 60.514442 -5%
7863.93017
6 1%
8/1/12 9.22 -2% 20.53 8.92% 59.25
-
2.46% 64.147217 2.19% 62.974274 4%
8014.93017
6 2%
9/1/12 9.9 2% 20.68 0.71% 60.56 2.20% 63.880287
-
0.42% 62.096306 -1% 8251 3%
10/1/1 17.17 2% - 61.56 1.65% 64.480652 0.94% 61.794579 0% 8221.40039 0%
13

2 18.45
10.76
% 1
11/1/1
2 15.82 -4% 18.14
-
1.69% 59.10
-
4.00% 64.62323 0.22% 68.662415 11%
8260.42968
8 0%
12/1/1
2 16.43 -5% 16.57
-
8.66% 55.99
-
5.26% 62.608448
-
3.12% 74.381645 8%
8443.50976
6 2%
1/1/13
11.45 3%
14.18
-
14.41
% 57.72 3.09% 60.94202
-
2.66% 76.072678 2%
8894.70996
1 5%
2/1/13 9.06 1% 13.74
-
3.09% 58.40 1.19% 61.837399 1.47% 81.839737 8%
8868.71972
7 0%
3/1/13 9.78 6% 13.86 0.87% 61.74 5.72% 57.007977
-
7.81% 81.871651 0%
9107.04003
9 3%
4/1/13 8.12 5% 13.87 0.03% 64.54 4.53% 58.12318 1.96% 93.915459 15%
9276.87988
3 2%
5/1/13 8.53 -4% 14.08 1.57% 62.15
-
3.71% 56.507069
-
2.78% 94.924889 1%
9302.26953
1 0%
6/1/13
7.78 0%
12.50
-
11.25
% 62.23 0.13% 58.028294 2.69% 97.436279 3% 9112.69043 -2%
7/1/13 11.32 5% 14.27
14.12
% 65.11 4.63% 60.599945 4.43% 98.437622 1%
9558.83007
8 5%
8/1/13 11.67 -6% 15.36 7.67% 60.97
-
6.36% 59.863216
-
1.22% 97.54126 -1%
9270.66015
6 -3%
9/1/13 13.23 2% 15.13
-
1.50% 62.16 1.96% 59.596485
-
0.45%
103.38776
4 6%
9621.24023
4 4%
10/1/1
3 23.61 4% 16.59 9.64% 64.51 3.77% 60.32048 1.21% 105.4618 2%
10009.6396
5 4%
11/1/1
3 26.87 6% 17.65 6.38% 68.09 5.55% 64.937576 7.65%
101.90078
7 -3%
10183.2304
7 2%
12/1/1
3 27.04 -3% 17.91 1.48% 66.14
-
2.86% 69.996796 7.79% 99.350204 -3%
10400.3203
1 2%
1/1/14
30.87 -5%
15.98
-
10.77
% 63.13
-
4.54% 65.300972
-
6.71% 93.515671 -6%
9967.65039
1 -4%
2/1/14 32.32 0% 16.80 5.12% 63.15 0.03% 72.603363
11.18
% 93.955696 0%
10425.8603
5 5%
3/1/14 30.16 2% 17.23 2.61% 64.61 2.32% 81.56842
12.35
% 91.999985 -2%
10527.7695
3 1%
4/1/14 34.93 5% 18.95 9.94% 67.82 4.96% 78.928818
-
3.24% 89.971558 -2%
10627.1699
2 1%
14

5/1/14 40.56 -4% 20.33 7.27% 65.32
-
3.69% 72.456001
-
8.20% 93.863525 4%
10756.3095
7 1%
6/1/14 44.17 -2% 21.00 3.34% 64.27
-
1.61% 70.925217
-
2.11% 99.298996 6%
10979.4199
2 2%
7/1/14 46.07 -2% 21.61 2.87% 62.99
-
1.98% 67.218666
-
5.23% 97.913162 -1%
10726.4296
9 -2%
8/1/14 52.26 3% 23.17 7.22% 64.64 2.61% 71.843544 6.88% 94.867645 -3%
11046.2900
4 3%
9/1/14 52.6 2% 22.88
-
1.22% 65.90 1.95% 72.104416 0.36% 97.531425 3%
10702.9296
9 -3%
10/1/1
4 58.48 0% 24.53 7.20% 65.73
-
0.26% 87.379379
21.18
%
101.78318
8 4% 10845 1%
11/1/1
4 63.66 15% 27.01
10.12
% 75.44
14.78
% 91.623108 4.86%
103.27619
2 1%
10955.4101
6 1%
12/1/1
4 50.29 -2% 25.18
-
6.79% 74.01
-
1.90% 85.295898
-
6.91%
105.24728
4 2%
10839.2402
3 -1%
1/1/15 46.01 0% 26.73 6.14% 73.64
-
0.50% 94.510551
10.80
%
108.07388
3 3%
10537.2197
3 -3%
2/1/15 59.69 -1% 29.31 9.64% 72.73
-
1.24%
101.39169
3 7.28%
113.54258
7 5%
11062.7900
4 5%
3/1/15 62.94 -2% 28.50
-
2.75% 71.28
-
2.00% 109.81266 8.31%
117.33375
5 3%
10899.1904
3 -1%
4/1/15 60.39 -5% 28.66 0.58% 68.04
-
4.54%
109.75436
4
-
0.05%
118.26668
5 1%
11049.7402
3 1%
5/1/15 68.23 -5% 29.84 4.10% 64.75
-
4.84%
110.55053
7 0.73%
117.30538
2 -1%
11056.2998
1 0%
6/1/15 64.45 -4% 28.85
-
3.32% 62.23
-
3.89%
147.05358
9
33.02
%
113.78340
9 -3% 10805.2002 -2%
7/1/15 56.11 1% 27.90
-
3.29% 63.15 1.48%
157.69296
3 7.24%
113.53672
8 0%
10882.2802
7 1%
8/1/15
49.51 -10%
25.93
-
7.04% 56.79
-
10.07
%
151.92906
2
-
3.66%
100.70788
6 -11% 10176.5 -6%
9/1/15 48.8 1% 25.48
-
1.74% 57.27 0.85%
188.53906
3
24.10
%
101.08222
2 0% 9799.69043 -4%
10/1/1
5
63.11 -12%
27.61 8.34% 50.56
-
11.72
%
205.92272
9 9.22%
105.76790
6 5%
10460.9599
6 7%
11/1/1
5 67.84 3% 27.33
-
1.00% 51.97 2.80%
189.04902
6
-
8.19%
107.32051
8 1%
10409.5898
4 0%
12/1/1 59.53 4% - 54.14 4.18% 178.15522 - 106.13018 -1% 10143.4199 -3%
15

5 24.42
10.64
% 8 5.76% 2
1/1/16 79.5 9% 22.58
-
7.52% 59.10 9.16%
171.70295
7
-
3.62%
103.53385
2 -2%
9632.70019
5 -5%
2/1/16 89.15 0% 22.43
-
0.67% 59.09
-
0.03%
170.80177
3
-
0.52% 89.793167 -13%
9559.53027
3 -1%
3/1/16 93.85 3% 25.42
13.33
% 61.00 3.24%
156.17726
1
-
8.56% 91.708069 2%
10207.3701
2 7%
4/1/16
114.3
1 -2%
21.87
-
13.99
% 60.00
-
1.64%
155.79603
6
-
0.24% 91.106827 -1%
10436.9199
2 2%
5/1/16
115.0
3 6%
23.29 6.53% 63.51 5.85%
120.91824
3
-
22.39
% 92.638718 2% 10441 0%
6/1/16
103.2
6 4% 22.44
-
3.68% 66.00 3.92%
144.38717
7
19.41
% 89.574944 -3%
10489.7597
7 0%
7/1/16
108.3
8 0% 24.46 9.01% 65.95
-
0.07%
139.43293
8
-
3.43% 99.975639 12%
10785.5097
7 3%
8/1/16
123.3
3 -2% 24.90 1.81% 64.57
-
2.10%
147.40763
9 5.72%
108.06505
6 8% 10764.75 0%
9/1/16
114.3
8 2% 26.68 7.13% 65.63 1.64%
145.30880
7
-
1.42%
103.97107
7 -4%
10721.7402
3 0%
10/1/1
6 91.84 -3% 26.79 0.43% 63.72
-
2.91%
138.58082
6
-
4.63%
105.18764
5 1%
10481.8896
5 -2%
11/1/1
6 93.41 1% 26.08
-
2.66% 64.09 0.59%
158.94009
4
14.69
%
107.79777
5 2%
10838.4599
6 3%
12/1/1
6
102.2
3 -2% 27.47 5.33% 62.90
-
1.86%
164.21585
1 3.32%
106.58819
6 -1%
11056.9003
9 2%
1/1/17 90.03 -3% 28.78 4.77% 61.17
-
2.75% 165.87619 1.01%
105.26949
3 -1%
11222.9599
6 2%
2/1/17
102.5
7 6% 32.49
12.89
% 65.01 6.28%
169.29907
2 2.06%
102.90491
5 -2%
11512.3896
5 3%
3/1/17 91.48 2% 34.22 5.32% 66.06 1.62%
202.70233
2
19.73
% 98.785088 -4%
11492.8496
1 0%
4/1/17 91.25 5% 34.22
-
0.01% 69.41 5.07%
208.44827
3 2.83%
100.09968
6 1%
11536.0800
8 0%
5/1/17 97.45 5% 36.39 6.34% 72.57 4.55%
224.34315
5 7.63% 99.544296 -1%
11598.0302
7 1%
6/1/17 98.55 -3% 34.45
-
5.33% 70.34
-
3.07%
225.45628
4 0.50% 97.211647 -2% 11761.7002 1%
16

7/1/17
124.8
7 6% 35.57 3.27% 74.35 5.70%
236.50889
6 4.90%
104.45023
3 7%
11967.6699
2 2%
8/1/17
117 -2%
39.23
10.27
% 72.56
-
2.40%
210.62533
6
-
10.94
%
104.57982
6 0%
11875.6904
3 -1%
9/1/17 123.8 1% 37.01
-
5.66% 73.08 0.72%
212.75537
1 1.01%
110.30959
3 5%
12209.1601
6 3%
10/1/1
7
140.7
1 12% 40.59 9.68% 81.66
11.74
%
222.42919
9 4.55%
116.50417
3 6%
12341.0097
7 1%
11/1/1
7
142.1
3 11% 41.27 1.66% 90.94
11.36
%
212.95426
9
-
4.26%
118.70271
3 2%
12627.7998
1 2%
12/1/1
7
147.8
1 2% 40.78
-
1.17% 92.36 1.56%
212.50999
5
-
0.21%
119.48254
4 1%
12808.8398
4 1%
1/1/18 152.2 9% 40.35
-
1.06% 100.75 9.09%
199.93275
5
-
5.92%
129.58270
3 8%
13367.9599
6 4%
2/1/18
163.0
7 -16%
42.93 6.38% 85.07
-
15.56
%
184.45039
4
-
7.74%
126.46340
2 -2%
12652.5498
1 -5%
3/1/18
149.4
1 -1% 40.60
-
5.42% 84.09
-
1.16%
170.67170
7
-
7.47%
122.48910
5 -3%
12452.0595
7 -2%
4/1/18
181.6
6 0% 39.99
-
1.50% 84.11 0.02%
166.44123
8
-
2.48%
125.20252
2 2%
12515.3603
5 1%
5/1/18
174.7
1 -7%
45.22
13.08
% 78.48
-
6.69%
126.12577
1
-
24.22
%
122.32530
2 -2%
12527.1396
5 0%
6/1/18
181.3
5 4% 44.96
-
0.56% 81.95 4.42% 133.76799 6.06%
123.12824
2 1% 12504.25 0%
7/1/18
196.4
3 4% 46.22 2.80% 85.37 4.18%
143.65725
7 7.39%
126.02458
2 2%
12963.2802
7 4%
8/1/18
187.5
8 7% 55.29
19.62
% 91.72 7.43%
168.15512
1
17.05
%
118.60688
8 -6%
13016.8896
5 0%
9/1/18
191.9
6 -1% 55.03
-
0.48% 90.37
-
1.47% 180.76976 7.50%
118.86497
5 0%
13082.5195
3 1%
10/1/1
8 270.3 7% 53.35
-
3.05% 96.50 6.78%
171.19967
7
-
5.29%
113.48163
6 -5%
12208.0595
7 -7%
11/1/1
8
291.3
8 -3%
43.53
-
18.40
% 93.97
-
2.62%
211.07153
3
23.29
%
117.77658
1 4%
12457.5498
1 2%
12/1/1
8
295.3
5 -5%
38.59
-
11.36
% 89.64
-
4.61%
176.17103
6
-
16.53
%
112.54120
6 -4%
11374.3896
5 -9%
17

1/1/19
312.4
6 3% 40.71 5.52% 92.72 3.44%
214.32917
8
21.66
%
119.41505
4 6%
12299.0302
7 8%
2/1/19 351.6 3% 42.35 4.03% 95.78 3.30%
246.45884
7
14.99
%
117.34999
8 -2%
12644.8095
7 3%
3/1/19
391.4
3 -1% 46.66
10.17
% 94.37
-
1.47%
286.20288
1
16.13
%
114.42205
8 -2%
12696.8798
8 0%
4/1/19
337.4
5 6% 49.30 5.64% 100.04 6.01%
323.19259
6
12.92
%
119.83194
7 5%
13060.6503
9 3%
5/1/19
367.6
8 -1%
43.01
-
12.76
% 98.68
-
1.36%
300.53726
2
-
7.01%
113.99547
6 -5%
12264.4902
3 -6%
6/1/19
374.1
3 10% 48.81
13.49
% 108.05 9.50% 297.79071
-
0.91% 120.21006 5%
13049.7099
6 6%
7/1/19
301.7
8 0% 52.54 7.64% 107.95
-
0.10%
292.09860
2
-
1.91%
125.11580
7 4%
13066.5996
1 0%
8/1/19
286.1
3 4% 51.48
-
2.02% 111.74 3.52%
335.25723
3
14.78
%
126.64763
6 1%
12736.8798
8 -3%
9/1/19
267.6
6 4% 55.44 7.70% 116.63 4.38%
302.64880
4
-
9.73%
130.38996
9 3%
13004.7402
3 2%
10/1/1
9 339.5 -1% 61.58
11.07
% 115.24
-
1.20%
273.25738
5
-
9.71%
136.12710
6 4%
13171.8095
7 1%
11/1/1
9 340.4 2% 66.16 7.43% 117.04 1.56% 269.32254
-
1.44%
137.75808
7 1%
13545.2099
6 3%
12/1/1
9 340.8 0% 72.91
10.21
% 116.79
-
0.21%
283.16952
5 5.14%
138.08229
1 0%
13913.0302
7 3%
(Yahoo ! Finance, 2020).
Mean, Variance and Standard Deviation
Mean is described as the aggregate of data given. Numerically, it is calculated as the sum
of data/information number. Mean measurement can allow shareholders understand the
movement of the stocks and the organizational productivity of the period. Netflix 7.45%, Apple
31.59, Walmart 7.45% , Coca cola-10.77% and Toyota 6.65%% are the average of stock
selections. Variance is an instrument used to determine how various random variables affect the
estimated price of stock. Whereas, standard deviation is a method that is used to know how
accurate the stock is to mean that allows to measure the amount of stock. The standard deviation
18

of Netflix is 4.8%, Apple 8.79, Walmart 4.8%, Toyota is 5.25 and Coca-Cola 6.4%. Therefore,
the variance and standard deviation help investors identify patterns and relationships on how the
stock move around on the market that can helps investors to invest where they are precisely
concerned.
Table 2
Particulars
Mean (Average
return)
Standard
Deviation Variance C.V.
Netflix 7.45% 4.80% 0.23% 0.64
Apple Inc. 31.59% 8.79% 0.77% 0.28
Walmart 7.45% 4.80% 0.23% 0.64
Coke -10.77% 6.64% 0.44% 0.62
Toyota Motor Co. Ltd. 6.65% 5.25% 0.28% 0.79
Correlations Coefficient between Stocks
Table 3
Correlation Netflix Apple Inc. Walmart Coke
Toyota Motor
Co. Ltd.
Netflix 1.00 0.04 1.00 0.06 0.06
Apple Inc. 0.04 1.00 0.04 0.08 0.32
Walmart 1.00 0.04 1.00 0.06 0.06
Coke 0.06 0.08 0.06 1.00 0.12
Toyota Motor Co.
Ltd. 0.06 0.32 0.06 0.12 1.00
In the above table, correlations coefficient between Netflix, Apple Inc., Walmart, Coke
and Toyota Motor Co. Ltd is shown. The correlation coefficient represents a statistical method
to compare the connection between various variable directions, with a strong link shown on
financial market and a weak relationship shown on financial market. From the above calculation,
we can see that there is no negative relation between any industry.
19

Portfolios mean monthly return, standard deviation, variance and weight on each stock
The coefficient of correlation is a mathematical calculation that measures the correlation
value among two factors. Its value varies between –1.0 and 1.0.
1 represents a very good relationship.
-1 represents a clear negative interaction.
0 represents the relationship is non-existent.
The coefficient of determination is often used in financing and investments to assess the
degree of the correlation and how they are associated between the stocks. It provides knowledge
on how a sector is doing in comparison to other sectors or comparisons. A shareholder can
expand its portfolio through the addition of lower corresponding bonds to reduce the risk of
fluctuations in portfolio management.
Table 4
Particulars
Portfolio-1
(based on
return)
Portfoli-2
Based on SD
(High risk)
Portfolio-3
(based on SD
Low risk)
Portfolio-4
(variance)
Netflix 12% 35% 5% 5%
Apple Inc. 35% 25% 15% 15%
Walmart 25% 20% 25% 20%
Coke 18% 10% 20% 25%
Toyota Motor Co.
Ltd. 10% 10% 35% 35%
TOTAL 100% 100% 100% 100%
Return on
Portfolio 12.54% 11.58% 7.15% 6.24%
SD of Portfolio 6.57% 6.03% 5.92% 6.02%
20

Variance of
Portfolio 0.46% 0.39% 0.37% 0.38%
CV of Portfolio 0.30 0.44 0.39 0.32
Portfoli
o Based On Description
1
Average annual
return of the
securities
Apple has 31.59%, maximum average return, so in the above
portfolio, the maximum amount of 35% is allocated.
2
Maximum S.D
(high risk)
Excessive standard deviation indicates complex instability and
greater risks but with maximum returns. Thus, in the above
portfolio, a maximum amount is allocated to bonds with higher
standard deviation, Apple has the maximum at 8.79%, so it is
allocated as the maximum amount at 35%.
3
Lower S.D
(low risk)
The investors who are enthusiastic to take less risk in portfolio
management, this is considered as the appropriate portfolio but
the problem is, the return is least. Now, the advanced proportion
is allocated to bonds with the least standard deviation. Walmart
and Netflix has the lowest standard deviation at 4.8%.
4
Coefficient of
Variation
(C.V.)
Bonds with a least C.V are allocated as the maximum amount in
the portfolio. Apple has the lowest C.V. is 0.28.
21

Each five companies have been allocated emphasized on weightage. Now we can
compute the Standard deviation, expected rate of return and coefficient of variation of the
portfolios.
Now,
Expected average return of portfolio 1 = Weight of Netflix * Return of Netflix + Weight of
Apple * Return of Apple + Weight of Walmart * Return of Walmart + Weight of Coke * Return
of Coke + Weight of Toyota Motors * Return of Toyota
= 12%*7.45%+ 31.59%*35% + 7.45%*5%+ 18%*10.77%+10%*6.65
= 48.2%
Standard Deviation of Portfolio= Weight of Netflix * S.D of Netflix + Weight of Apple * S.D
of Apple + Weight of Walmart * S.D of Walmart + Weight of Coke * S.D of Coke + Weight of
Toyota Motors * S.D of Toyota
=12%*4.8% +31.59%*8.79% +7.45%*4.8% + 18%* 6.64%+10%*5.25%
= 5.43%
Coefficient of Variation (C.V) of Portfolio= Weight of Netflix * S.D of Netflix + Weight of
Apple * C.V of Apple + Weight of Walmart * C.V of Walmart + Weight of Coke * C.V of Coke
+ Weight of Toyota Motors * C.V of Toyota
= 12%*0.64 +31.59%* 0.28+7.45%*0.64 + 18%* -0.62+10%*0.79
=0.18
Therefore, the expected rate of return, standard deviation (S.D) and Coefficient of
Variation (C.V) are calculated.
Optimal Portfolio Selection
22

In particular, a portfolio with a relatively higher yield and a least C.V is regarded as optimal
portfolio due to a positive risk-reward balance. From the above table, Portfolio 4 shows that it
has the greater proportion and lower C.V, 0.46 minimum C.V of other 3 portfolios is for bonds
with lower (C.V.). The bonds in the portfolio are classified in the following proportions.
Table 5
Security Proportion (Weightage)
Netflix 20%
Apple 45%
Walmart 20%
Coke 25%
Toyota Motors Co. Ltd 35%
The above table shows the combination of weights between 5 different bonds which
minimizes the portfolio.
Coefficient of Variation (C.V) of all Portfolios
Table 6
Portfolio Coefficient of variation
1 (Based on average annual return) 0.30
2 (Based on high standard deviation) 0.44
3 (Based on low standard deviation) 0.39
4 (Based on low C.V.) 0.32
23

In Table 4, we can see that Portfolio 4 seems to have the maximum average expected
returns of 12.54%, a C.V of 0.44 and a medium S.D at 6.57%, which makes it a risky portfolio
and yet the possibility of highest return in the sense of the threat sector.
Coefficient of variation of S.D is based on portfolios which is slightly higher at 0.44 and 0.39.
Now,
Optimal portfolio,
Expected rate of return = 12.54%
Standard deviation of the rate of return = 6.57%
Efficient Frontier
Efficient portfolio is known as the graphical representation that displays its maximum
return at a particular frontier. This refers to investments. It is necessary to evaluate the value of
the expenditure in the right stock for every other portfolio to deliver a significant outcome. The
efficient frontier integrates and analyzes the estimated return rate and the risks involved. The
graph shows risk for the y-axis as well as a return to the x-axis with a normal distribution from
the plot and difference in the different weight combinations 100 times
The different combination of commodities yields different yields in a portfolio. The
optimum value system for the greatest expected return for a given identified risks, i.e. minimum
risk for an overall return standard, is also an optimal limit. Portfolios underneath the efficient
frontier which is not optimal, as they do not include an appropriate profit for the provided risk
level (Elton, Gruber, & Padberg, 1998). In order to diversify commodities and to balance the
risk-reward exchange, an efficient frontier is important in portfolio management.
24

Table 6
Portfolio
Range of Standard
Deviation
Expected Return of
Portfolio
1 6.57% 12.54%
2 6.03% 11.58%
3 5.92% 7.15%
4 6.02% 6.24%
From the above table we can see that, there the 4 portfolio which has higher return with given
weights assigned to each commodity.
Figure 1 (the graph diagram of efficient frontier of the portfolio)
5.80% 5.90% 6.00% 6.10% 6.20% 6.30% 6.40% 6.50% 6.60% 6.70%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
Efficient Frontier Curve
25

Normal Distribution of Annual Return Rate of Portfolio
A normal distribution is a symmetrical distribution function around the average. It indicates that
information similar to the mean arises more often than average. Normal distribution seems to be
the typical type of distribution of probability expected in the stocks as well as other data analysis.
A bell-shaped curve characterizes it. Standard deviation and average are two major variables of a
normal distribution.
The expected rate of return was estimated at 12.54 % for the best portfolio, that is
portfolio 4, Table 6, focused on the C.V. We are aware that portfolio's average return rate is
usual. The typical regular annual return distribution of the portfolio is determined by means of an
Excel sheet Formula (NORM.S. DIST) in which, FALSE indicates the information is
not aggregate Rockafellar & Uryasev, 2002). Considering an overall portfolio return rate of –
4.6% to 12.54%
Normal Distribution
Function
Normal Dist.= NORM.S. DIST
(S44, FALSE)
Data Normal Distribution
12.54% 39.58%
9.54% 39.71%
8.54% 39.75%
7.54% 39.78%
6.54% 39.81%
5.54% 39.83%
26

4.54% 39.85%
3.54% 39.87%
2.54% 39.88%
1.54% 39.89%
0.54% 39.89%
-0.46% 39.89%
-1.46% 39.89%
-2.46% 39.88%
-3.46% 39.87%
-4.46% 39.85%
Figure 2
Graphical representation of Distribution of Return on Portfolio
27

-6.00% -4.00% -2.00% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00%
39.40%
39.50%
39.60%
39.70%
39.80%
39.90%
40.00%
Normal Distribution
Conclusion
Without analyzing possible risks and focusing at projected returns and high profitability
for their money and resources, shareholders do not invest. Portfolio investments are a leading
technique for handling inventory investments, shares, and other monetary alternatives that
contribute to balancing each during crises and volatile market crashes. These investment funds
28

are systematically measured and correctly computed by evaluating the performance with
investment products. It is more about picking the correct stocks on the basis of differentiation,
potential, profitability and beneficial ratio position; it also involves volatility evaluations, return
measures, liquidity and so forth. I identified the standard deviation and invested appropriately in
the investments and also evaluated 10% risk and 99% assurance where the tests indicate a good
outcome and competitiveness.
References
Elton, E. J., Gruber, M. J., & Padberg, M. W. (1998). Simple Criteria for Optimal Portfolio
Selection: Tracing Out the Efficient Frontier. The Journal of Finance, 33(1), 296-302.
doi:10.2307/2326368
29