2. An investor is considering five securities in the portfolio with following expected return, standard deviation and beta: Assets Return % Apple 30.00 25.00 Standard Deviation % 0.1 Beta 1.40 Microsoft 9.00 12.00 0.40 Facebook 15.00 23.00 1.30 Netflix 22.00 13.00 0.20 Amazone 35.00 21.00 1.45 Tesla 25.00 20.00 1.20 The market, with index used as proxy, is expected to have a standard deviation of 13%. The investor has decided to put 10%, 20%, 15%, 25%, AND 15% respectively in Apple, ISY Microsoft, Facebook, Netflix, Amazone and Tesla. Find out the expected return and risk of the portfolio. Of the total risk what risk is attributable to systematic risk and what risk is non- systematic (10) risk in the portfolio.

2. An investor is considering five securities in the portfolio with following expected return, standard deviation and beta: Assets Return % Apple 30.00 25.00 Standard Deviation % 0.1 Beta 1.40 Microsoft 9.00 12.00 0.40 Facebook 15.00 23.00 1.30 Netflix 22.00 13.00 0.20 Amazone 35.00 21.00 1.45 Tesla 25.00 20.00 1.20 The market, with index used as proxy, is expected to have a standard deviation of 13%. The investor has decided to put 10%, 20%, 15%, 25%, AND 15% respectively in Apple, ISY Microsoft, Facebook, Netflix, Amazone and Tesla. Find out the expected return and risk of the portfolio. Of the total risk what risk is attributable to systematic risk and what risk is non- systematic (10) risk in the portfolio.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter3: Risk And Return: Part Ii

Section: Chapter Questions

Problem 3P: Two-Asset Portfolio Stock A has an expected return of 12% and a standard deviation of 40%. Stock B...

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