Flirting with Risk

1254 WordsNov 30, 20086 Pages
|KOÇ UNIVERSITY | |FINANCIAL MANAGEMENT 501 | |Case 17: Flirting with Risk | | | FINANCIAL MANAGEMENT Answers to Questions of Case 17 1. Imagine you are Bill. How would you explain to Mary the relationship between risk and return of individual stocks? As…show more content…
10. Based on these calculations what do you think Bill should propose as a possible portfolio combination for Mary? Only investing her money to Utility Company is the best option since it gives higher expected return and also its expected return is positive all times and higher than the expected returns of the Treasury Bill. Although it is more riskier than the Treasury Bill its risk is less than other stocks (See excel file for standard deviations of non-diversified
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