Rose Berry is attempting to evaluate two possible portfolios, which consist of the same five assets held in different proportions. She is particularly interested in using beta to compare the risks of the portfolios, so she has gathered the data shown in the following table: Portfolio weights Asset Asset beta Portfolio A Portfolio B 1 1.43 15% 20% 2 0.69 40% 5% 3 1.15 10% 35% 4 1.42 5% 20% 5 0.97 30% 20% Totals 100% 100% a. Calculate the betas for portfolios A and B. b. Compare the risks of these portfolios to the market as well as to each other. Which portfolio is more risky?

Rose Berry is attempting to evaluate two possible portfolios, which consist of the same five assets held in different proportions. She is particularly interested in using beta to compare the risks of the portfolios, so she has gathered the data shown in the following table: Portfolio weights Asset Asset beta Portfolio A Portfolio B 1 1.43 15% 20% 2 0.69 40% 5% 3 1.15 10% 35% 4 1.42 5% 20% 5 0.97 30% 20% Totals 100% 100% a. Calculate the betas for portfolios A and B. b. Compare the risks of these portfolios to the market as well as to each other. Which portfolio is more risky?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 13QTD

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Jack Ma is attempting to evaluate two possible portfolios – both consisting of the same five assets but held in different proportions. He is particularly interested in using beta to compare the risk of the portfolios and in this regard has gathered the following data. assets assets beta Portfolio A Portfolio B 1 1.30 10% 30% 2 0.70 30% 10% 3 1.25 10% 20% 4 1.10 10% 20% 5 0.90 40% 20% a) Calculate the betas for portfolio A and B. b) Compare the risk of each portfolio to the market as well as to each other C) Which portfolio is more risky and why?
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You are attempting to evaluate two possible portfolios, which consist of the same five assets held in different proportions. You are particularly interested in using beta to compare the risks of the portfolios, so he has gathered the data shown in the following table. Calculate the betas for portfolios X and Y. Compare the risks of these portfolios to the market as well as to each other. Which portfolio is more risky?
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