Chapter 11, Problem 1MC

Summary Introduction

To determine: The Reasons that supports in investing 100% in ECY’s Stocks.

Introduction: Expected Return is a process of estimating the profits and losses an investor earns through the expected rate of returns. Beta and market return are some factors that are associated to estimate the expected return. Standard deviation is apportioned of distribution of a collection of figures from its mean.

A portfolio is an accumulation of investments that are claimed or owned by an individual or business. A portfolio comprise of the following,

• Bonds – Bonds are considered as investments in debt which is intended to generate interests.
• Mutual Funds – Mutual funds are considered as a pool of money from several investors.
• Stocks – Stocks are considered as funds for sole proprietorship.