Question: Use the following data to explore the risk-return relation and the concept of beta for Apple stock, Alphabet (Google) stock, and the S&P 500 market
Use the following data to explore the risk-return relation and the concept of beta for Apple stock, Alphabet (Google) stock, and the S&P 500 market index:
| Year | Apple Stock Price | Alphabet Stock Price | S&P 500 Market Index |
| 2017 | $174.09 | $1,072.01 | 2,601.42 |
| 2016 | $115.82 | $807.80 | 2,238.83 |
| 2015 | $105.26 | $765.84 | 2,043.94 |
| 2014 | $113.99 | $521.51 | 2,058.90 |
| 2013 | $80.01 | $559.76 | 1,848.36 |
| 2012 | $72.80 | $358.17 | 1,426.19 |
| Market risk premium: RPM = | 4.01% |
| Risk-free rate: rRF = | 1.30% |
- Calculate the portfolio beta of the four-stock portfolio and the required return on the portfolio (9 Points) ***Please Provide the Excel Functions
| Beta | Portfolio Weight | ||
| Apple | 25% | ||
| Stock A | 0.77 | 15% | |
| Stock B | 0.99 | 40% | |
| Stock C | 1.42 | 20% | |
| 100% | |||
| Portfolio Beta = | |||
| Risk-free rate | Market Risk Premium | Portfolio Beta | Required Return on Portfolio |
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