Calculate the expected retum of your portfolio (Hint: The expected return of a portfolio equals the weighted average of the individual stock's expected rehum, where invested in each stock) b. Calculate the portfolio beta c. Given the preceding information, plot the security market line on paper Plot the stocks from your portfolio on your graph d. From your plot in part c, which stocks appear to be your winners and which ones appear to be losers? e. Why should you consider your conclusions in part d to be less than certain? a. The expected retum of your portfolo in (Round to two decimal places)
Calculate the expected retum of your portfolio (Hint: The expected return of a portfolio equals the weighted average of the individual stock's expected rehum, where invested in each stock) b. Calculate the portfolio beta c. Given the preceding information, plot the security market line on paper Plot the stocks from your portfolio on your graph d. From your plot in part c, which stocks appear to be your winners and which ones appear to be losers? e. Why should you consider your conclusions in part d to be less than certain? a. The expected retum of your portfolo in (Round to two decimal places)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Need all five parts.....don't attempt if you can't answer. ...it's a single question with five parts....
Transcribed Image Text:(Portfolio beta and security market line) You own a portfolio consisting of the following stocks
The risk-free rate is 9 percent. Also, the expected return on the market portfolio is 15 percent
a. Calculate the expected return of your portfolio (Hint: The expected return of a portfolio equals the weighted average of the individual stock's expected return, where the weights are the percentage
invested in each stock)
b. Calculate the portfolio beta
c. Given the preceding information, plot the security market line on paper. Plot the stocks from your portfolio on your graph
d. From your plot in part c, which stocks appear to be your winners and which ones appear to be losers?
e. Why should you consider your conclusions in part d to be less than certain?
a. The expected retum of your portfolio in (Round to two decimal places)
Transcribed Image Text:Stock
1
Percentage of Portfolio
30%
35%
12%
5%
5
18%
(Click on the icon in order to copy its contents into a spreadsheet.)
234
4
Beta
1.00
0.80
1.15
0.62
1.50
Expected Return
17%
15%
23%
11%
26%
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