Question

Your portfolio consists of the following three holdings: a) Tesla (TSLA) 1,000 shares worth $260 per share, TSLA Beta is 0.60 b) Amazon (AMZN) 250 shares worth $1,700 per share, AMZN Beta is 1.55 c) Facebook (FB) 500 shares worth $180 per share, FB Beta is 1.10 None of these stocks pay dividends. The "risk-free asset” (3mo Treasury Bills) has a yield of 3.00% What is the total dollar value of your portfolio? 2 What is the portfolio weight of Facebook (FB) in the portfolio (answer to two decimal places)? What is the Beta of the portfolio (answer to two decimal places)? - 4 The returns of your portfolio over the last five years were as follows: +5%, +10%, -20%, +15%, +12%. What was the average realized annual return on your portfolio over this time (answer to two decimal places)? 5 Regarding the return of the portfolio this upcoming year, you estimate that there are three possible economic states and three possible outcomes. Taking all this information in aggregate, what is the expected return on the portfolio this year (answer to two decimal places)? Scenario Probability Return on Portfolio Bear Market 20% - 10% Normal Market 65% + 7% Bull Market 15% +15%

Answer 1

1.
=1000*260+250*1700+500*180=775000

2.
=500*180/(1000*260+250*1700+500*180)=0.116129032258065

3.
=(1000*260*0.6+250*1700*1.55+500*180*1.1)/(1000*260+250*1700+500*180)=1.17903225806452

4.
=(1.05*1.1*0.8*1.15*1.12)^(1/5)-1=3.54224255393565%

5.
=20%*(-10%)+65%*7%+15%*15%=4.80%