11. Mary holds a portfolio with the following securities: Security Market Value

Question

11. Mary holds a portfolio with the following securities:

       Security        Market Value Beta         Beta

       Stock A                $498,111                    1.04

       Stock B                $893,838                     0.88

       Stock C                $558,895                     2.07

         Calculate the beta portfolio

12. You hold a portfolio with the following securities:

Security                      Percent of portfolio                     Expected Rate of Return

Stock A                                     26%                                                     13.87%

Stock B                                     45%                                                        9.45%

Stock C                                     29%                                                        6.23%

Calculate the portfolio expected return

Explanation / Answer

NB: Please break the Questions to groups of 2-3 Questions. Answering 10 Questions in one go is very difficult.

11> Beta of the portfolio=(1.04*498111+0.88*893838+2.07*558895)/(498111+893838+558895) 1.26 12> Portfolio Expected Return=0.26*13.87+0.45*9.45+0.29*6.23 9.67 13> Portfolio Return=0.49*12.92+0.11*7.39+0.4*9.44 10.92 14> Portfolio Expected Return=0.39*(-3.5+0.12*(12.6)+0.49*6.9 3.53 15> Mean Return=0.08*2.69+0.56*16.7+0.36*4.5 11.19 Variance=0.08*(2.69-11.19)^2+0.56*(16.7-11.19)^2+0.36*(4.5-11.19)^2 38.89 SD=Square Root (38.89) 6.24

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