Question: a. Which portfolio is/are good to create? Provide a reason. b. Which portfolio is/are overvalued and undervalued? Portfolio P1 P2 P3 P4 P5 P6

Portfolio P1 Weight for stock A Weight for stock 100% 0% P2 90% 10% P3 80% 20% 1.381 1.312 Beta 1.45 Require

a. Which portfolio is/are good to create? Provide a reason. b. Which portfolio is/are overvalued and undervalued? Portfolio P1 P2 P3 P4 P5 P6 P7 P8 P9 P10 P11 Weight 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% for stock A Weight 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% for stock Beta 1.45 1.381 1.312 1.243 1.174 1.105 1.036 0.967 0.898 0.829 0.76 Require 12.15 11.667 11.184 10.701 10.218 9.735 9.252 8.769 8.286 7.803 7.32 Return 96 96 96 96 96 96 96 %

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