The Merchant Of Venice By William Shakespeare Essay example

1439 Words Dec 7th, 2015 6 Pages
I. Introduction
“My ventures are not in one bottom trusted,
Nor to one place; nor is my whole estate”
(Shakespeare et al., 2007)
This quote discussing the diversification of Antonio’s investments in the first act of Shakespeare’s play “The Merchant of Venice” was written in the 16th century. But it wasn’t until 1952 that Harry Markowitz wrote his paper “Portfolio Selection” that made him “the father of modern portfolio theory”(Markowitz, 1999). Since then, the use of statistical tools by financial professionals has become very common. In this report, the performance of Microsoft Corp. (hereinafter called MSFT) and Apple Inc. (hereinafter called Apple) will be analysed, by looking at both monthly and yearly, simple and excess returns. First, the descriptive statistics of each individual stock will be examined, and the “Efficient Frontier” and “Capital Market Line” will be drawn, then the performances of the two shares against each other will be compared, and finally an examination of the performances of both companies using CAPM. All the calculations are found on an excel file that will be referenced throughout this report.
II. Analysis
1. Descriptive statistics
Looking at the Buy and Hold Return (MSFT 37833.33%, Apple 17480.65%) and Compounded Annual Returns (MSFT 23.63%, Apple 20.28%) of both stocks over the whole sample period, it is noticed that MSFT generates a higher return. In addition, MSFT had higher simple yearly returns over 16 years of the sample period.

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