Q16. You have constructed a portfolio with a beta of 1.12. You expect the market to decline
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Question:
Q17. What does alpha measure? If the expected return for Portfolio X in 2019 was 9 %, and the portfolio actually return was 11.00%, what was the alpha for Portfolio X? SHOW YOUR WORK
Q18. Given what has been learned in this chapter, what alpha & beta characteristics of a portfolio would an investor most likely seek, when deciding between two comparable equity portfolios, relative the different stages of a market cycle (See Chapter 16). Indicate: relatively higher or relatively
lower for each.
Contraction Phase
Alpha:
Beta:
Stock Market Trough
Alpha:
Beta:
Recovery and Expansion
Alpha:
Beta:
Equity Cycle Peak
Alpha:
Beta:
Q19. Given the time frame between January 1 2020 to the last Friday's closing price for the S&P/TSX, how might an investor have expected a stock to perform over this period, with a beta greater than 1, and with a beta less than 1, in absolute terms, and relative to the market? Show your work, alongwith key numbers (such as opening and closing values for the S&P/TSX over this period) and provide an explanation that would be suitable for client situation.
Related Book For
Business Statistics In Practice
ISBN: 9780073401836
6th Edition
Authors: Bruce Bowerman, Richard O'Connell
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