Year-to-date, Yum Brands had earned a 3.40 percent return. During the same time period, Raytheon earned 4.43 percent and Coca-Cola earned −0.50 percent.If you have a portfolio made up of 40 percent Yum Brands, 30 percent Raytheon, and 30 percent Coca-Cola, what is your portfolio return?
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.
Year-to-date, Yum Brands had earned a 3.40 percent return. During the same time period, Raytheon earned 4.43 percent and Coca-Cola earned −0.50 percent.
If you have a portfolio made up of 40 percent Yum Brands, 30 percent Raytheon, and 30 percent Coca-Cola, what is your portfolio return?
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