Business Finance

Running head: BUSINESS FINANCE
Business Finance
Name of the Student:
Name of the University:
Authors Note:

BUSINESS FINANCE
1
Table of Contents
Part II: Risk and Return..............................................................................................................2
1. Computing continuously compounded return using daily data:............................................2
2. Computing Expected return:..................................................................................................8
3. Computing the standard deviation:........................................................................................8
4. Computing the (daily) return correlation coefficient:............................................................8
5. Commenting on the correlation coefficient between JBHIFI and Market:............................8
6. Calculating beta and detecting the difference between different results:..............................8
7. Computing the required rate of return using CAPM:.............................................................9
8. Computing the expected return and standard deviation of your portfolio:..........................10
9. Comparing and explaining the differences between the portfolio risk and return versus the
individual securities risk and return:........................................................................................10
10. Giving an example of spurious correlation and explain why it is called spurious
correlation:...............................................................................................................................11
Reference and Bibliography:....................................................................................................13

BUSINESS FINANCE
2
Part II: Risk and Return
1. Computing continuously compounded return using daily data:
Date Market return jbhifi return
2018-01-
02 0.15% 2.27%
2018-01-
03 0.16% 0.67%
2018-01-
04 0.71% 1.98%
2018-01-
07 0.11% 2.09%
2018-01-
08 0.08% 2.74%
2018-01-
09 -0.57% -2.03%
2018-01-
10 -0.48% 4.34%
2018-01-
11 0.01% 1.31%
2018-01-
14 0.18% -0.64%
2018-01-
15 -0.35% 1.16%
2018-01-
16 -0.51% -1.81%
2018-01-
17 -0.06% -1.58%
2018-01-
18 -0.18% 1.19%
2018-01-
21 -0.21% -0.22%
2018-01-
22 0.73% 2.41%
2018-01-
23 0.29% -1.70%
2018-01-
24 -0.07% 1.31%
2018-01-
28 0.37% 1.47%
2018-01-
29 -0.85% -0.10%
2018-01-
30 0.18% 1.52%
2018-01- 0.85% -0.69%

BUSINESS FINANCE
3
31
2018-02-
01 0.50% -2.23%
2018-02-
04 -1.64% -1.85%
2018-02-
05 -3.29% -2.43%
2018-02-
06 0.86% 0.55%
2018-02-
07 0.23% 2.28%
2018-02-
08 -0.97% 0.46%
2018-02-
11 -0.30% -8.34%
2018-02-
12 0.63% 2.14%
2018-02-
13 -0.29% 1.32%
2018-02-
14 1.15% 0.56%
2018-02-
15 -0.06% -0.52%
2018-02-
18 0.65% 3.38%
2018-02-
19 0.03% -0.47%
2018-02-
20 0.03% 0.33%
2018-02-
21 0.17% -3.46%
2018-02-
22 0.78% 0.75%
2018-02-
25 0.67% 1.11%
2018-02-
26 0.21% -1.93%
2018-02-
27 -0.68% -2.85%
2018-02-
28 -0.68% 0.61%
2018-03-
01 -0.78% -0.50%
2018-03-
04 -0.53% -0.31%
2018-03-
05 1.08% 1.84%
2018-03-
06 -0.93% -1.18%