Consider these two stocks: AT&T Inc. (T) and Verizon Communications Inc. (VZ). Use the daily adjusted closing prices from March 1, 2015 to August 12, 2015 as historical data.
1. Estimate the mean rate of return and the standard deviation of each of these assets. Moreover estimate their correlation coefficient Ï, and their covariance.
2. Using their correlation coefficient Ï, find the weight of each of these assets that will give an efficient portfolio with minimum variance. Deduce the return of that portfolio.
Consider these two stocks: AT&T Inc. (T) and Verizon Communications Inc. (VZ). Use the daily adjusted closing prices from March 1, 2015 to August 12, 2015 as historical data.
1. Estimate the mean rate of return and the standard deviation of each of these assets. Moreover estimate their correlation coefficient Ï, and their covariance.
2. Using their correlation coefficient Ï, find the weight of each of these assets that will give an efficient portfolio with minimum variance. Deduce the return of that portfolio.
Related questions
Assignment Please read the instructions carefully. You need to write 6 sentences for each article which includes what i have given in instructions.
Instructions
For the two articles below:
Write a few sentences explaining how the article is relevant to Verizon or Sprint Mobile. How and why would you expect it to affect stock prices, and whether they were affected in the way you expected (do this in terms of expected future earnings). Because traders buy or sell stocks immediately as new information becomes available, stock prices respond rapidly. Be sure to include the date of the article. You should be able to distinguish whether the news was relevant to only one of your stocks, your industry, or the whole market by noting the relative price changes - if only one of your stocks went up while the market was down, the news affected only your stock; if both your stocks moved differently from the market, the news probably affected your industry as a whole; if your stocks moved in tandem with the market, the news probably broadly affected the whole economy. You should also be able to explain why the news affected just one company, the industry, or the whole market. The articles selected should be balanced chronologically and topically.
Below are stock prices from Nov 16th through 19th
| Verizon Communications Inc. VZ (U.S.: NYSE) | Sprint Corp. S (U.S.: NYSE) | |||||||||||
| Time | close | S&P 500 | Time | Close | S&P 500 | |||||||
| NOV | 16 | 4:03PM EST | 45.04 | 1.49 | 16 | 4:00PM EST. | 4.21 | 1.49 | ||||
| 17 | 4:00 | 45.08 | -0.13% | 17 | 4:03 | 4.4 | -0.13% | |||||
| 18 | 4:05 | 45.38 | 1.62% | 18 | 4:00 | 3.99 | 1.62% | |||||
| 19 | 4:00 | 45.76 | -0.11% | 19 | 4:00 | 4.05 | -0.11% | |||||
| 20 | 20 | |||||||||||
1.Sprint Promotion Sends Investors Running
The carrier should be more focused on improving profitability and free-cash-flow generation.
Updated Nov. 19, 2015 1:15 p.m. ET
Sprint (S: NYSE)
By Evercore ISI ($3.99, Nov. 19, 2015)After days of hinting at a âbig announcement,â Sprint released new pricing plans which offer a 50% discount to plans from T-Mobile US, Verizon Communications and AT&T -- while also covering up to $650 of switching costs.
If a 50% discount from Sprint (ticker: S) sounds familiar, thatâs because it is essentially the same as the companyâs earlier âcut your bill in halfâ promotion -- though, notably, this time it extends to T-Mobile ( TMUS ) customers as well as those from Verizon ( VZ ) and AT&T ( T). And, while this may drive some uptick in subscriber attraction, we note: 1) we believe the most cost-sensitive subscribers likely took advantage of this offer the first time around; 2) we do not agree with Sprintâs contention that transitioning subscribers are likely to opt for higher data plans versus the discounted offerings; and 3) the offer comes at a time when Sprint should be more focused on improving profitability and free-cash-flow generation (and is somewhat contradictory to other recent initiatives such as increasing unlimited pricing by $10 and attempting to cut $2.5 billion in annual costs from its budget). It is this last point -- on the impact to profitability -- that appears to have upset investors the most, sending Sprint shares down 9.3% Wednesday.
Prior to (and on) Sprintâs fiscal-second-quarter call, the company announced that it would seek to cut $2.5 billion in costs. We saw these costs cuts, along with Sprintâs decision to not participate in the 600 megahertz (MHz) auction, to use off-balance-sheet financing, and raise its unlimited pricing by $10, as evidence that Sprint was attempting to improve its cash flow position. However, as part of this current promotion, Sprint is offering up to $650 in reimbursements for early termination fees (ETFs) and other fees (provided you turn your phone in). Because we believe that the most cost-sensitive subscribers may have already taken advantage of this offer the first time around, the corresponding increase in subscriber traction may not be enough to offset the negative implications to profitability and free cash flow.
Sprint sees potential upside from more data, same price. The emphasis of the promotion is to cut your bill in half. Despite this, Sprint believes subscribers are likely to opt for the same nominal value plans, but twice the data. We do not agree. If Sprintâs intention was to see customers double their data, the pitch should have been âdouble your data,â not âtake 50% off.â
Customers can trial the offer for 28 days. If they are not satisfied, and have purchased a device through Sprint, they can return the device with no restocking fee. Importantly, the offer is for activations from Nov. 20 through Jan. 6 and the promotional pricing will run for 24 months. While the offer is available to new Sprint customers, current Sprint subscribers can get a free [Apple (AAPL)] iPad with one year of free service, if they sign a two-year contract. Sprint expects the iPad offer to reduce churn (as customers with more devices become âstickierâ).
Based on our last published model, our discounted-cash-flow-driven year-end 2016 price target is $4. [We rate Sprint at Hold.]
-- Jonathan Schildkraut
-- Justin Ages
The companies mentioned in Hot Research are subjects of research reports issued recently by investment firms. Their opinions in no way represent those of Barrons.com or Dow Jones & Company, Inc. Some of the reportsâ issuers have provided, or hope to provide, investment-banking or other services to the companies being analyzed. Share prices at the time the report was issued and the date of the report are in parentheses.
7:39 am ET
Nov 19, 2015
2.The Morning Download: Ford CEO Says
By
Steve Rosenbush
CONNECT
Good morning. Ford Motor Co. CEO Mark Fields says that wireless updates for vehicle software have more or less arrived. Thatâs going to lead to big changes in the way people build and use cars, which are bound to adopt more characteristics of mobile phones. CIO Journalâs Rachael King has the story.
Ford launched Sync Connect with the 2017 Ford Escape at the LA Auto Show this week. The platform lets drivers unlock or start the vehicles from their smartphones. âSync Connect will serve as the platform to offer over-the-air updates allowing us to go beyond the infotainment system such as updating other parts of the vehicle like the engine or driver-assist technologies,â said Mr. Fields, speaking at a press event Wednesday in San Francisco.
Wireless updates mean that phones donât have to be brought into the shop or replaced every time that the operating system is brought up to date, or that a security patch is available. And of course, they facilitate the use of apps and the development of ecosystems. Now, the automobile, which until now has more or less remained the same during its long life cycle, is about to become much more dynamic.
Macquarie taps Barclays BCS -4.34% IT Executive as CIO. Justin Raoul Moffitt, an 18-year IT veteran with Barclays, steps in as CIO at Macquarie starting in February 2016, a company spokesman said.
| Verizon Communications Inc. VZ (U.S.: NYSE) | Sprint Corp. S (U.S.: NYSE) | |||||||||||
| Time | close | S&P 500 | Time | Close | S&P 500 | |||||||
| NOV | 16 | 4:03PM EST | 45.04 | 1.49 | 16 | 4:00PM EST. | 4.21 | 1.49 | ||||
| 17 | 4:00 | 45.08 | -0.13% | 17 | 4:03 | 4.4 | -0.13% | |||||
| 18 | 4:05 | 45.38 | 1.62% | 18 | 4:00 | 3.99 | 1.62% | |||||
| 19 | 4:00 | 45.76 | -0.11% | 19 | 4:00 | 4.05 | -0.11% | |||||
| 20 | 4:00 | 45.39 | 0.38 | 20 | 4:00 | 3.83 | 0.38 | |||||
| 21 | 21 | |||||||||||
