Construct a market weighted index using 3 stocks below over a one year period to find the index return. WPI Po= 19 Qo= 500 P1= 25 Q1= 500 UMB Po= 19 Qo= 300 P1= 12 Q1= 600 ZZT Po= 34 Qo= 200 P1= 34 Q1= 200
Risk and return
Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary.
Capital Asset Pricing Model
Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.
1. Construct a market weighted index using 3 stocks below over a one year period to find the index return.
WPI Po= 19 Qo= 500 P1= 25 Q1= 500
UMB Po= 19 Qo= 300 P1= 12 Q1= 600
ZZT Po= 34 Qo= 200 P1= 34 Q1= 200
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How did you get the 1000 and 1300?Can you please explain on how did you calculate the 22 and 20.38?
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