Question

15. A securities dealer has equity holdings as follows: Company Position Number of Price per share Equity beta Tenet Healthcare long 1000 28.52 1.80 Meritor 1500 21.61 2.25 Simpson Manufacturing long 300 83.27 1.32 Qorvo Inc short 500 101.86 1.32 long a. What is the beta of the dealer's equity holdings? b. What is the market risk of the dealer's equity holdings if the market return has been -4.95% or lower 5 times in the last 2500 trading days? c. Specify the level of adversity indicated by this DEAR and the method used.

Answer 1

03/08/2018 Value of Share la Company Position (No. Shart Price) - Tenet healthcare Long $28520 Merictor Long $32415 Simpson ofg $24981. Qowo ine ( $50930) Short Totallé) $34986 (Valm of Share*8) $51356 $72933.75 $32974.92 C$6722 7.6 $90017.07 Beta of broekfolio babere Evalu 2 Shorum2 Evalue of Share $90017.87 $34986 2.57 106 7

Date by If Market fall by 4.95%, then value of A hore portfolio decreas 74095%*2157 - 12 7215% il Value of foutfolio - $34986 - 12.7215% becomes 2 $ 30535.26. Dealer vised method of liverafication to minimize e risk of fout folis luy similtaenoudly Selling horro ine having similar leto as Odemboon Manufacturing terca through method og diversification unsystemalie market size can be eliminated of or reduced