When calculating the risk and return of a 2 or 3 stock portfolio, what are the statistical components that you should take into account and why?
When calculating the risk and return of a 2 or 3 stock portfolio, what are the...
When calculating the risk and return of a 2 or 3 stock portfolio, what are the statistical components that you should take into account and why?
2. 3: Risk and Rates of Return: Risk in Portfolio Context Risk and Rates of Return: Risk in Portfolio Context The capital asset pricing model (CAPM) explains how risk should be considered when stocks and other assets are held . The CAPM states that any stock's required rate of return is the risk-free rate of return plus a risk premium that reflects only the risk remaining diversification. Most individuals hold stocks in portfolios. The risk of a stock held in...
Stock J has a beta of 1.19 and an expected return of 12.95 percent, while the stock K has a beta of 0.84, and expected return of 10.40 percent. You want a portfolio with the same risk as the market. How much you will invest in each stock? What is expected return of your portfolio?
Calculating Portfolio Betas You own a stock portfolio invested 15 percent in Stock Q, 25 percent in Stock R, 40 percent in Stock S, and 20 percent in Stock T. The betas for these four stocks are . 78, 87, 1.13, and 1.45, respectively. What is the portfolio beta? Calculating Portfolio Betas You own a portfolio equally invested in a risk-free asset and two stocks. If one of the stocks has a beta of 1.29 and the total portfolio is...
doud 22. Excess return portfolio performance measures Adjust portfolio risk to match benchmark risk. Compare portfolio returns to expected returns under CAPM. Evaluate portfolio performance on the basis of return per unit of risk. Indicate historic average differential return per unit of historic variability of differential return. None of the above. 23 An example of a market cap weighted stock market indicator series is the a. Dow Jones Industrial Average. b. Nikkei Dow Jones Average. c. S&P 500 Index. d....
8. 24. Calculating Portfolio Weights and Expected Return. You have a portfolio with the following: Stock Number of Shares 525 780 Price $43 $29 $94 $51 Expected Return 10% 15% 11% 14% 435 680 What is the expected return of your portfolio?
Problem 11-23 Calculating Portfolio Weights [LO 1] Stock J has a beta of 1.22 and an expected return of 13.26 percent, while Stock K has a beta of .77 and an expected return of 10.2 percent. You want a portfolio with the same risk as the market. What is the portfolio weight of each stock? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., 32.1616.)
If you were able to put together a portfolio that completely eliminated all risk, what return would you expect to earn and why? If someone called you and told you that he/she could guarantee you high returns on your investments with little or no risk, what would you do and why. When there is uncertainty in the marketplace, what happens to yield spreads and why? Your grandfather has great faith in bonds and has heard about some “high yield bonds”...
You have a portfolio of investment which consists of Stock A with a return of A% and Stock B with a return of B%. Given the following average returns and standard deviations for both Stock A and Stock B, M(A) = 13%, M(B) = 51% s(A) = 2%, s(B) = 12% what is the absolute risk (standard deviation) of your portfolio assuming that the returns of Stock A and Stock B are uncorrelated? Hint: Notice that the return of your...
Crne my CALCULATING TO LCULATING PORTFOLIO RETURNS Stock A 6.00 Stock 12.00% 2.67% 16. Oson Mean Variance - Standard deviation - Covance - Correlation Proportion of Stock A in portfolio 1 CAN The CAPM Method for the expected return I have even you monthly returns for the stock market, Good, and the three month treasuryrir Portfoli Portfolio Portfolio 1) Gen the data, figure out the correlation between two stos out the table for the mean variance, and standard deviation for...