allocate 1. Look up the beta for your company and 2 other companies (use the same...
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allocate 1. Look up the beta for your company and 2 other companies (use the same website or source). 2. Assume that you have $25,000 (total) to invest in these three companies. How would the principal between the three? Calculate the percentage weights. you 3. Multiply each company's beta by their percentage weight. Sum the total. Is the resulting portfolio beta less than or greater than the beta of your company? Would you make any changes to your portfolio based on this information? 4. Calculate the Holding period return. Assume that you purchased the shares for each of these companies a year ago. Based on the weights calculated in (2), determine the number of shares you can purchase in each of the companies (assume that you are allowed to invest in fractional shares). How much is your return? 5. Look up an ETF like the SPDR (often used as a benchmark to compare portfolios). Again, assume that all $25,000 was invested in the benchmark a year ago. What would have been the return? HPR = [(Ending price - Beginning price) + Dividends]/Beginning price 1. Comment on the results of the portfolio in comparison to the benchmark. 2. Comment on the risk (beta) of the portfolio in comparison to the benchmark risk (beta). 3. Which "portfolio" would you rather invest in and why? Explain. As a shareholder in these companies, what would you like to see in terms of value and returns? allocate 1. Look up the beta for your company and 2 other companies (use the same website or source). 2. Assume that you have $25,000 (total) to invest in these three companies. How would the principal between the three? Calculate the percentage weights. you 3. Multiply each company's beta by their percentage weight. Sum the total. Is the resulting portfolio beta less than or greater than the beta of your company? Would you make any changes to your portfolio based on this information? 4. Calculate the Holding period return. Assume that you purchased the shares for each of these companies a year ago. Based on the weights calculated in (2), determine the number of shares you can purchase in each of the companies (assume that you are allowed to invest in fractional shares). How much is your return? 5. Look up an ETF like the SPDR (often used as a benchmark to compare portfolios). Again, assume that all $25,000 was invested in the benchmark a year ago. What would have been the return? HPR = [(Ending price - Beginning price) + Dividends]/Beginning price 1. Comment on the results of the portfolio in comparison to the benchmark. 2. Comment on the risk (beta) of the portfolio in comparison to the benchmark risk (beta). 3. Which "portfolio" would you rather invest in and why? Explain. As a shareholder in these companies, what would you like to see in terms of value and returns?
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