Consider a portfolio with four stocks - Apple, Microsoft, Facebook and Tesla during the two-year period between the beginning of 2016 and the end of 2017. You want to find how much you would have made if you invested $1 million at the beginning of the given period. Find the answer by revising the given code and by answering the five questions.

Q1 Which of the four stocks performed the best on the day of 2017-12-28?

Tesla preformed the best, increasing by 1.19%.

## [1] "AAPL" "MSFT" "TSLA" "FB"
## NULL
##            TSLA.Adjusted AAPL.Adjusted MSFT.Adjusted FB.Adjusted
## 2016-01-04        223.41     101.01418      51.92759      102.22
## 2016-01-05        223.43      98.48284      52.16449      102.73
## 2016-01-06        219.04      96.55557      51.21690      102.97
## 2016-01-07        215.65      92.48048      49.43544       97.92
## 2016-01-08        211.00      92.96949      49.58706       97.33
## 2016-01-11        207.85      94.47488      49.55863       97.51
##            TSLA.Adjusted AAPL.Adjusted MSFT.Adjusted FB.Adjusted
## 2016-01-04        223.41     101.01418      51.92759      102.22
## 2016-01-05        223.43      98.48284      52.16449      102.73
## 2016-01-06        219.04      96.55557      51.21690      102.97
## 2016-01-07        215.65      92.48048      49.43544       97.92
## 2016-01-08        211.00      92.96949      49.58706       97.33
## 2016-01-11        207.85      94.47488      49.55863       97.51
##            TSLA.Adjusted AAPL.Adjusted MSFT.Adjusted FB.Adjusted
## 2017-12-21        331.66      174.2994      85.10024      177.45
## 2017-12-22        325.20      174.2994      85.11020      177.20
## 2017-12-26        317.29      169.8774      85.00071      175.99
## 2017-12-27        311.64      169.9073      85.30926      177.62
## 2017-12-28        315.36      170.3853      85.31921      177.92
## 2017-12-29        311.35      168.5428      85.14006      176.46
##            TSLA.Adjusted AAPL.Adjusted MSFT.Adjusted  FB.Adjusted
## 2016-01-04            NA            NA            NA           NA
## 2016-01-05  8.947227e-05  -0.025059273  0.0045620639  0.004989258
## 2016-01-06 -1.964821e-02  -0.019569582 -0.0181654225  0.002336202
## 2016-01-07 -1.547662e-02  -0.042204679 -0.0347825815 -0.049043439
## 2016-01-08 -2.156269e-02   0.005287754  0.0030670100 -0.006025286
## 2016-01-11 -1.492888e-02   0.016192258 -0.0005733552  0.001849378
##            TSLA.Adjusted AAPL.Adjusted MSFT.Adjusted  FB.Adjusted
## 2017-12-21    0.00814637   0.003785477 -0.0002338459 -0.002473450
## 2017-12-22   -0.01947775   0.000000000  0.0001169914 -0.001408848
## 2017-12-26   -0.02432350  -0.025369949 -0.0012864381 -0.006828397
## 2017-12-27   -0.01780703   0.000175868  0.0036300285  0.009261833
## 2017-12-28    0.01193675   0.002813552  0.0001166227  0.001689016
## 2017-12-29   -0.01271556  -0.010813631 -0.0020998084 -0.008205885

Q2 What’s portfolio return on the day of 2017-12-28? Interpret.

The portfolio had a return had a return of .3796%. This means the value of the portfolio grew .3976%.

##            portfolio.returns
## 2016-01-05     -0.0038546196
## 2016-01-06     -0.0137102452
## 2016-01-07     -0.0354267785
## 2016-01-08     -0.0049659849
## 2016-01-11      0.0005346121
## 2016-01-12      0.0132536347
##            portfolio.returns
## 2017-12-21      0.0021024580
## 2017-12-22     -0.0047335246
## 2017-12-26     -0.0142099659
## 2017-12-27     -0.0004807838
## 2017-12-28      0.0037956019
## 2017-12-29     -0.0083187855
##            portfolio.returns
## 2016-01-05     -0.0038546196
## 2016-01-06     -0.0137102452
## 2016-01-07     -0.0354267785
## 2016-01-08     -0.0049659849
## 2016-01-11      0.0005346121
## 2016-01-12      0.0132536347
##            portfolio.returns
## 2017-12-21       0.002389625
## 2017-12-22      -0.005404079
## 2017-12-26      -0.014577550
## 2017-12-27      -0.001300070
## 2017-12-28       0.004139086
## 2017-12-29      -0.008449070

Q3 Which of the two strategies would have netted a bigger return?

Rebalancing would have a higher return of .4139%. The buy and hold strategy would yield .3796%

Q4 Which of the four stocks performed the best during the study period? Hint: See the performance of the buy-and-hold portfolio.

During the study period, Facebook outpreformed the other three stocks.

Q5 Which of the four stocks performed the best during the last month of the study period? Hint: See the performance of the rebalanced portfolio. Note that the portfolio is rebalanced monthly.

Microsoft had the largest weight, therefore it preformed tbe best during the last month of the study period.

##            TSLA.Adjusted AAPL.Adjusted MSFT.Adjusted FB.Adjusted
## 2016-01-05     0.2509898     0.2446783     0.2521123   0.2522195
## 2016-01-06     0.2494788     0.2432247     0.2509735   0.2563230
## 2016-01-07     0.2546387     0.2415156     0.2511411   0.2527046
## 2016-01-08     0.2503914     0.2440044     0.2531686   0.2524355
## 2016-01-11     0.2465216     0.2478229     0.2528882   0.2527672
## 2016-01-12     0.2457786     0.2481310     0.2518710   0.2542194
##            TSLA.Adjusted AAPL.Adjusted MSFT.Adjusted FB.Adjusted
## 2017-12-21     0.2254482     0.2620413     0.2488794   0.2636310
## 2017-12-22     0.2221084     0.2632876     0.2500923   0.2645117
## 2017-12-26     0.2198297     0.2603070     0.2533710   0.2664923
## 2017-12-27     0.2160190     0.2604780     0.2544131   0.2690899
## 2017-12-28     0.2177710     0.2602232     0.2534806   0.2685252
## 2017-12-29     0.2168055     0.2595685     0.2550702   0.2685558
## [1] 1 1 1 1 1 1
## [1] 1 1 1 1 1 1
##            TSLA.Adjusted AAPL.Adjusted MSFT.Adjusted FB.Adjusted
## 2016-01-05     0.2509898     0.2446783     0.2521123   0.2522195
## 2016-01-06     0.2494788     0.2432247     0.2509735   0.2563230
## 2016-01-07     0.2546387     0.2415156     0.2511411   0.2527046
## 2016-01-08     0.2503914     0.2440044     0.2531686   0.2524355
## 2016-01-11     0.2465216     0.2478229     0.2528882   0.2527672
## 2016-01-12     0.2457786     0.2481310     0.2518710   0.2542194
##            TSLA.Adjusted AAPL.Adjusted MSFT.Adjusted FB.Adjusted
## 2017-12-21     0.2613060     0.2478090     0.2471796   0.2437054
## 2017-12-22     0.2576084     0.2491555     0.2485517   0.2446843
## 2017-12-26     0.2550607     0.2464267     0.2519041   0.2466085
## 2017-12-27     0.2508449     0.2467909     0.2531476   0.2492165
## 2017-12-28     0.2527928     0.2464651     0.2521336   0.2486085
## 2017-12-29     0.2517051     0.2458774     0.2537481   0.2486694
## [1] 1 1 1 1 1 1
## [1] 1 1 1 1 1 1