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You are considering investing CAD$100,000 of cash in the common stock of five Canadian companies (listed on the Toronto Stock Exchange).

Before investing this money you want to calculate a variety metrics to get a sense of the potential risk and return of potential portfolios made up of different combinations of these 5 stocks. The 5 companies and their portfolio weights are given to you on the ANSWERS worksheet. DATA FROM YAHOO FINANCE PLEASE

Therefore, for this assignment you are required to:

1) Calculate the average return and variance for each stock based on the 10 year ANNUAL data provided (see 'Stock Price Data!' worksheet).

2) Calculate the Beta of each stock using 1 years (most recent year) worth of DAILY data.

3)

a) Briefly describe why the market portfolio defined in 2) is an appropriate proxy for the market portfolio.

b) Briefly describe any deficiencies with this market proxy.

4) Calculate the following PORTFOLIO metrics using the 10 year ANNUAL data you have obtained from Yahoo Finance.

a) average return,

b) Beta, and

c) Variance.

Portfolio Components:
Company name		Rogers Communications inc.	The Bank of Nova Scotia	Fortis Inc.	Canadian Tire Corporation, Limited	Loblaw Companies Limited
Company stock symbol		RCI-A.TO	BNS.TO	FTS.TO	CTC.TO	L.TO	Total
Portfolio Weights		35%	10%	15%	15%	25%	100%

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