Question: Question: How did the overall risk and return change when you added the stocks together in a portfolio? Unit 4 Discussion Table Complete the required
Question: How did the overall risk and return change when you added the stocks together in a portfolio?
| Unit 4 Discussion Table | |||||
| Complete the required information in the table. | |||||
| Stock Symbol | % of portfolio | Beta | Contribution to portfolio Beta | Expected Return (using CAPM) | Contribution to Portfolio Return |
| Apple | 50% | 1.31 | 0.5*1.31= 0.655 | 5.64+(21.9-5.64) *1.31= 26.94% | 0.5 * 26.94 = 13.47% |
| Amazon | 50% | 1.34 | 0.5*1.34=0.670 | 5.64+(22.03-5.64) *1.34= 27.60% | 0.5 * 27.60 = 13.80% |
| Portfolio Beta | 0.655 + 0.670 = 1.3250 | Portfolio Return | 0.5 * 26.94 + 0.5 * 27.60 = 27.27% | ||
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