Look back at Table 7 5 shown below a What is the beta of a portfolio that has 40 invested in Ford and 60 in Pfizer b Would you invest in this portfolio if you had no superior information about the prospects for these stocks Devise an alternative portfolio with the same expected return and less risk...

a The beta of the portfolio with 40 invested in Ford and 60 invested in Pfizer is 1008 040 x 153 060 ...

Look back at Table 7.5 shown below. a. What is the beta of a portfolio that has

Question:

Look back at Table 7.5 shown below.
a. What is the beta of a that has 40% invested in Ford and 60% in Pfizer?
b. Would you invest in this if you had no superior information about the prospects for these stocks? Devise an alternative with the same and less risk.
c. Now repeat parts (a) and (b) with a that has 40% invested in Starbucks and 60% in Walmart.
Table 7.5

Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these... Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...