Sally, your secondary classmate who recently joined the asset management industry, shared the following information with...
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Sally, your secondary classmate who recently joined the asset management industry, shared the following information with you: Security Apple Inc. Amazon.com Inc. (a) Industry Technology Retail (b) Beta 1.22 1.19 Standard Deviation The yield to maturity on the treasury bonds and the market risk premium is 3% and 5% respectively. 32% 38% Appraise which security (i.e. Apple or Amazon) is more risky, and examine which security(ies) you will include in your investment portfolio. No computations are require, and your answer should not exceed 400 words. (20 marks) Construct a portfolio comprising three assets (i.e. Apple, Amazon and treasury bonds) which produces an expected return of 6% and a beta of 0.6, based on the above information. (20 marks) Sally, your secondary classmate who recently joined the asset management industry, shared the following information with you: Security Apple Inc. Amazon.com Inc. (a) Industry Technology Retail (b) Beta 1.22 1.19 Standard Deviation The yield to maturity on the treasury bonds and the market risk premium is 3% and 5% respectively. 32% 38% Appraise which security (i.e. Apple or Amazon) is more risky, and examine which security(ies) you will include in your investment portfolio. No computations are require, and your answer should not exceed 400 words. (20 marks) Construct a portfolio comprising three assets (i.e. Apple, Amazon and treasury bonds) which produces an expected return of 6% and a beta of 0.6, based on the above information. (20 marks)
Expert Answer:
Answer rating: 100% (QA)
a Assessing Risk and Portfolio Inclusion To determine which security Apple Inc or Amazoncom Inc is more risky we look at their respective standard dev... View the full answer
Related Book For
Auditing An International Approach
ISBN: 978-0071051415
6th edition
Authors: Wally J. Smieliauskas, Kathryn Bewley
Posted Date:
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