You wish to calculate the risk level of your portfolio based on its beta. The five stocks in the portfolio with their respective weights and betas are shown in the accompanying table. Calculate the beta of your portfolio.
Stock portfolio weight Beta
Alpha 20% 1.15
Centauri 10 0.85
Zen 15 1.60
Wren 20 1.35
Yukos 35 1.85
Click here for the solution: You wish to calculate the risk level of your portfolio based on its beta
Showing posts with label portfolio. Show all posts
Showing posts with label portfolio. Show all posts
Saturday, August 22, 2015
Tuesday, August 18, 2015
Suppose the realized rate of return on the market portfolio is one percentage point greater than its expected return
Suppose the realized rate of return on the market portfolio is one percentage point greater than its expected return. How would the realized rate of return compare with the expected return of a security with a beta of +2?
Click here for the solution: Suppose the realized rate of return on the market portfolio is one percentage point greater than its expected return
Click here for the solution: Suppose the realized rate of return on the market portfolio is one percentage point greater than its expected return
Tuesday, July 14, 2015
Your portfolio has three asset classes
Your portfolio has three asset classes. U.S. government T-bills account for 45% of the portfolio, large-company stocks constitute another 40%, and small-company stocks make up the remaining 15%. If the expected returns are 3.8% for the T-bills, 12.3% for the large-company stocks, and 17.4% for the small-company stocks, what is the expected return of the portfolio?
Click here for the solution: Your portfolio has three asset classes
Click here for the solution: Your portfolio has three asset classes
Tuesday, July 7, 2015
Tim's portfolio contains two stocks, Lightco and Shineco
P12-18 Tim's portfolio contains two stocks, Lightco and Shineco. Last year his portfolio returned 14 percent. Lightco's return was 5 percent and Shineco returned 20 percent. What are the weights of each in Tim's portfolio?
The following year Tim adds a third stock, Brightco, and reallocates his funds among the three stocks. Lightco and Shineco have the same weight in the portfolio, and Brightco's weight is one-half of Lightco. During the year Lightco returns 10 percent, Shineco returns 12 percent, and Brightco loses 5 percent. What was the return on his portfolio?
Click here for the solution: Tim's portfolio contains two stocks, Lightco and Shineco
The following year Tim adds a third stock, Brightco, and reallocates his funds among the three stocks. Lightco and Shineco have the same weight in the portfolio, and Brightco's weight is one-half of Lightco. During the year Lightco returns 10 percent, Shineco returns 12 percent, and Brightco loses 5 percent. What was the return on his portfolio?
Click here for the solution: Tim's portfolio contains two stocks, Lightco and Shineco
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