1.- Create a table that includes the name of the stocks in your stocktrak portfo
ID: 2740891 • Letter: 1
Question
1.- Create a table that includes the name of the stocks in your stocktrak portfolio and beta for each one. (Beta is available on the Morningstar or Net Advantage stock reports).
2.- What is beta for your portfolio? (Find it on stocktrak). Using beta for your portfolio, explain in one sentence how much risk you are taking compared to the market.
3.- Find the sharpe ratio of your portfolio on stocktrak.Explain in one sentence what the number means.
4.- Use the CAPM formula to calculate the expected return of your portolio. Assume a market risk premium of 3% and a risk free rate of 0.44%. This is your portfolio's annual expected return.
5.- Compare your current portfolio return (on stocktrack) to the expected return from (4). Your stocktrack portfolio return is the return that you have earned in one month and a half. Are you being compensated for the risk that you are taking?
Explanation / Answer
Yes as people in general go for stock which are always in the name of the market but a proffesional stock player, or a broker always does intensive reesearch, but we as a person go for the good stock but fail to understand that stock market is different from the market we know in general.
Ticker Company Beta Estimate Beta Estimate Beta Estimate Beta Estimate Expected return Sharpe Ratio Interpretation (long-term average) (current time-varying estimate) analysis analysis Long Short Long Short Long Short AAPL Apple Inc 0.97 0.71 stock is not volatile as compared to the market is risky as well as rewarding stock is not volatile as compared to the market is risky as well as rewarding 2.923% 2.258% -2.4832 -1.8176 investment return is lower than the risk free rate investment return is lower than the risk free rate ABT Abbott Laboratories 0.43 1.01 stock is not volatile as compared to the market is risky as well as rewarding then stock is volatile than the market or not risky and may not reward as well 1.541% 3.026% -0.04587 -0.10773 investment return is lower than the risk free rate investment return is lower than the risk free rate ACN Accenture Ltd 0.86 1.14 stock is not volatile as compared to the market is risky as well as rewarding then stock is volatile than the market or not risky and may not reward as well 2.642% 3.358% -0.02653 -0.03516 investment return is lower than the risk free rate investment return is lower than the risk free rate AEP American Electric Power 0.48 0.61 stock is not volatile as compared to the market is risky as well as rewarding stock is not volatile as compared to the market is risky as well as rewarding 1.669% 2.002% 0.028577 0.036316 investmentreturnismorethanriskfreerate investmentreturnismorethanriskfreerate AIG American International Group 2.12 1.61 then stock is volatile than the market or not risky and may not reward as well then stock is volatile than the market or not risky and may not reward as well 5.867% 4.562% 1.809067 1.373867 investmentreturnismorethanriskfreerate investmentreturnismorethanriskfreerate ALL Allstate Corporation 1.14 1.11 then stock is volatile than the market or not risky and may not reward as well then stock is volatile than the market or not risky and may not reward as well 3.358% 3.282% 0.116736 0.113664 investmentreturnismorethanriskfreerate investmentreturnismorethanriskfreerate AMGN Amgen Inc 0.56 0.66 stock is not volatile as compared to the market is risky as well as rewarding stock is not volatile as compared to the market is risky as well as rewarding 1.874% 2.130% 0.065164 0.0768 investmentreturnismorethanriskfreerate investmentreturnismorethanriskfreerate AMZN Amazon.Com Inc 1.16 1.28 then stock is volatile than the market or not risky and may not reward as well then stock is volatile than the market or not risky and may not reward as well 3.410% 3.717% -0.04868 -0.05372 investment return is lower than the risk free rate investment return is lower than the risk free rate APA Apache Corp 1.45 1.21 then stock is volatile than the market or not risky and may not reward as well then stock is volatile than the market or not risky and may not reward as well 4.152% 3.538% 0.247467 0.206507 investmentreturnismorethanriskfreerate investmentreturnismorethanriskfreerateRelated Questions
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