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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