Chapter 7, Problem 3CP

Summary Introduction

(A)

To determine:

What action Murray is required to take into increase portfolios expected return

Introduction

Expected return stands to be the loss or profit, anticipated by the investor on the investment which represents its expected return. In other words, it is the estimation with respect to the value of investments which comprises of change in dividend, payment and price computed from the probability distribution curve.

Summary Introduction

(B)

To determine:

What action Murray is required to take in order to decrease exposure of risk in his portfolio without engaging in lending or borrowing activities

Introduction:

Stock stands to be the general term which is taken into consideration for describing the company's ownership certificates. On the other hand share refers to the company's stock certificate. When a share of a particular company is held by an investor, he is known as a shareholder.