Please show full working a. What is the portfolio mean & variance (arithmetic only): i. For an equally weighted portfolio ? ii. For a market-value weighted portfolio ?(use market cap as of the beginning of the period)

Q: Portfolio A and Portfolio B are based on the following given annual returns: Portfolio A…

A: Detailed Analysis of Jensen's Alpha for Portfolio A and BIn the previous response, we calculated the…

Q: What is the relationship of a portfolio standard deviation to the weighted average standard…

A: The standard deviation measures volatility of an investment or the risk of an investment. The…

Q: 5. The Sharp ratio of a portfolio is defined as A. the ratio between the return of the portfolio and…

A: Sharpe Ratio: It is a ratio that is named after William Sharpe an American economist & is…

Q: Find the variance &Standard deveation of the portfolio

A: Excel Spreadsheet:

Q: a. What is the expected return of each asset? b. What is the variance and the standard deviation c.…

A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…

Q: The standard deviation of the returns of a portfolio is the geometric average of the standard…

A: Portfolio standard deviation measures the fluctuations in a portfolio how volatile a portfolio is…

Q: The slope of a regression line when the return on an individual stock's returns are regressed on the…

A: The problem case wants to identify the slope for a regression line that is drawn between the stock's…

Q: Discuss the difference between a price-weighted index and a value-weighted index. Give one example…

A: "Hi, Thanks for the Question. Since you asked multiple question, we will answer first question for…

Q: Discuss the factors to be considered in choosing a preferred portfolio when taking into account the…

A: A portfolio is the combination of various assets with varying returns and risks profile. A well…

Q: Which of the following statements is correct?   Select one: a.   Assuming a correlation…

A: The combination of stock will reduce the overall risk of the portfolio but it it depends on the…

Q: The VIX measures Select one: a.Realized volatility B. Current volatility C. Historical volatility D.…

A: The VIX stands for volatility index. Volatility index was the first benchmark which was created by…

Q: How do I calculate portfolio return and risk for an equally weighted portfolio using expected…

A: The portfolio return is defined as the gain/loss that is realized through an investment portfolio,…

Q: A manager who evaluates portfolios' investment performance adjusted for market risk is most likely…

A: Portfolio Performance metrics: There are several portfolio performance metrics that can be used to…

Q: Please answer all parts (a-d) with explanations thx.

A: Expected return (ER) refers to the average returns expected to be received on a particular share or…

Q: What are the the key concepts (e.g., the standard deviation of the portfolio is less than the…

A: The question is based on the explanation of key concept behind creating a portfolio with different…

Q: 1. What are some fixed-income portfolio benchmarks available and why are they used?

A: Market-capitalization-weighted indices like Citigroup World Government Bond Index and Barclays…

Q: Use attachments to answer questions This question relates to Diagrams 1 - 4 from the  diagrams…

A: Using portfolio theories concept.

Q: Portfolio Beta is the average of the Betas of the investments included in the portfolio.

A: Financial management consists of directing, planning, organizing and controlling of financial…

Q: ired Year 0 1 2 3 4 5 Return Alpha Sum Tracking Error Information Ratio Note: the numbers in red are…

A: Information ratio is calculated as shown below.

Q: For a market timer, the ________ will be higher when the market risk premium is higher Select one:…

A: The portfolio beta will be reflective of the systematic risk associated with a particular asset and…

Q: 2) Calculate the envelope set (frontier) for the following four assets and show that the individual…

A: In this question we will be calculating the Envelope Set for the four assets and plotting the…

Q: The beta of a portfolio​ is:   A. A measure of the correlation of betas of the securities in the…

A: The objective of the question is to identify the correct definition of the beta of a portfolio among…

Q: Portfolio  Suppose      rA ~ N (0.05, 0.01), rB ~ N (0.1, 0.04) with pA,B = 0.2 where rA and rB…

A: Variance = SD2  Expected return = ∑weight*return CCR is (return, standard deviation)

Q: Is the portfolio risk the weighted average of the variance or covariance?

A: The concept of variance which states the deviation from the total average or which is said to be the…

Q: 2. The following table gives information on the return and variance of assets A and B, whose…

A: 1. Return and Variance of Assets A and B:   - Asset A: Variance (σ²) = 0.0009, Expected Return…

Q: The Capital Asset Pricing Model (CAPM) describes a relationship between the expected return of,,,…

A: Solution:- Capital Asset Pricing Model (CAPM) is an equity model which calculates the required rate…

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.