Calculating Portfolio Betas. You own a stock portfolio invested 15 percent in Stock Q, 25 percent in Stock R, 40 percent in Stock S, and 20 percent in Stock T. The betas for these four stocks are .85, .91, 1.31, and 1.76, respectively. What is the portfolio beta?

Q: You own a portfolio that has $42,000 invested in Stock A and $11,500 invested in Stock B. If the…

A: To Find: Expected return on portfolio

Q: Analysts’ estimates on expected returns from equity investments are based on several factors. These…

A: Formula used: Required return of the portfolio = Risk-free rate + Beta* Market risk premium.

Q: You own a stock portfolio invested 25 percent in Stock Q, 15 percent in Stock R, 10 percent in Stock…

A: Portfolio beta will be reflective of the systematic risk of the portfolio and it cannot be…

Q: You own a portfolio that is 25 percent invested in Stock X, 35 percent in Stock Y, and 40 percent in…

A: Portfolio is the collection of different securities. portfolio return formula: portfolio return…

Q: You own a stock portfolio invested 24 percent in Stock Q, 21 percent in Stock R, 44 percent in Stock…

A: Stock Portfolio weight Beta Q 24% 0.86 R 21% 0.92 S 44% 1.32 T 11% 1.77

Q: You have $12,260 to invest in a stock portfolio. Your choices are StockX with an expected return of…

A: Return on stock X is 14.2%. Return on stock Y is 8.61%. Let the amount invested in stock X is $A.…

Q: You own a portfolio that is 28 percent invested in Stock X, 43 percent in Stock Y, and 29 percent in…

A: Portfolio is the collection of securities. portfolio return formula: portfolio return =∑nwn×rn…

Q: What is the beta of a portfolio consisting of one share of each of the following stocks, given their…

A:

Q: You own a stock portfolio invested 33 percent in Stock Q, 20 percent in Stock R, 37 percent in Stock…

A: Stock Weight Beta Q 33% 1.02 R 20% 1.08 S 37% 1.48 T 10% 1.93

Q: You are a long-term investor, having a portfolio of stocks X, Y and Z. Stocks betas are 1.01, 0.93…

A: The question is related to Portfolio Management. The Portfolio beta is calculated with the help of…

Q: Your portfolio has a beta of 0.95. The portfolio consists of 30 percent Treasury bills, 50 percent…

A:

Q: Your portfolio has a beta of 1.18 and consists of 15 percent U.S. Treasury bills, 40 percent Stock…

A: Portfolio beta (PB) = 1.18 U.S. T bill beta (B1) = 0 (Since risk free) Stock A beta (B2) = 1 (Since…

Q: Assume a portfolio is made up of three stocks: Expected Return Investment Beta Stock A 18% $150,000…

A: First weights of each stock in the investment is calculated as investment in stock divided by total…

Q: You own a stock portfolio invested 23 percent in Stock Q, 22 percent in Stock R, 43 percent in Stock…

A: Portfolio is a bunch of various assets or investments. To reduce or manage the risk, investors…

Q: Calculate the beta

A: A portfolio is the combination of stocks or shares in such a way that return derived is maximum with…

Q: A company has asked you to calculate the beta for their portfolio. The portfolio has the following…

A: Beta of portfolio is weighted average beta of all stocks in portfolio.

Q: Assume that you own a portfolio consisting of the following stocks: Stock Percentage of Portfolio…

A: The expected return on a portfolio calculates the expected value of a portfolio. The probability…

Q: You own a portfolio that is 23 percent invested in Stock X, 38 percent in Stock Y, and 39 percent in…

A: Stock Weight Return X 23% 11% Y 38% 14% Z 39% 16%

Q: You own a stock portfolio invested 30 percent in Stock Q, 20 percent in Stock R, 30 percent in Stock…

A: Stock Q = 30% Stock R = 20% Stock S = 30% Stock T = 20%

Q: Suppose you have four stocks in your portfolio and the beta of your portfolio is 1.06. You have…

A: Beta of Portfolio = Beta of A * Weight of A +Beta of B * Weight of B+Beta of C * Weight of C+Beta of…

Q: You own a stock portfolio invested 35 percent in Stock Q, 20 percent in Stock R, 30 percent in Stock…

A: Portfolio beta = (Weight of stock Q * Beta of stock Q) + (Weight of stock R * Beta of stock R) +…

Q: You have a portfolio that is invested 22 percent in Stock A, 32 percent in Stock B, and 46 percent…

A: Beta of portfolio is weighted average beta of individual stock's beta

Q: A two-share portfolio held by an institutional investor has the following information: Years (t)…

A: We will first calculate the standard deviation of the portfolio including ABC & XYZ and…

Q: Your portfolio consists of two securities. Total value of your portfolio is $120,000. In this value…

A: The beta can be computed using the following formula : Beta=Covariance…

Q: Suppose you have portfolio of four stocks Stock A, B, C and D, Total investment in these stocks is…

A: According to CAPM required rate is equivalent to risk free rate plus market risk premium.

Q: Suppose you have invested $35,000 in stocks with a Beta of 0.9 and another $17,000 invested in…

A: A portfolio consists of various securities such as shares, bonds, commodities that help the…

Q: Your portfolio has a beta of 1.05. The portfolio consists of 30 percent Treasury bills, 50 percent…

A: Here, Beta of stock A is equal to market beta. Market beta will be equal to 1. So, beta of stock A…

Q: Calculate the portfolio beta for the following portfolio: Stock A: $638 invested with a Beta of 1.3…

A: Portfolio refers to basket of different financial assets in which investment is made by single…

Q: Portfolio Expected Return. You own a portfolio that has $2,750 invested in Stock A and $3,900…

A: In this question we are required to calculate expected return of our portfolio having two stocks…

Q: You own a stock portfolio invested 27 percent in Stock Q, 17 percent in Stock R, 43 percent in Stock…

A: Formula: Portfolio beta = weight* Beta

Q: You have a portfolio that is invested 23 percent in Stock A, 36 percent in Stock B, 41 percent in…

A: Beta of the portfolio is the sum of the product of the weight of the stocks and beta of the stocks.

Q: Based on the table below, you invested 40% on Stock A and B and 20% on Stock Calculate the expected…

A: Expected return The expected return refers to the profit or loss that is anticipated by an investor…

Q: You own a portfolio that has $2,045 invested in Stock A and $4,096 invested in Stock B. If the…

A: Formula:

Q: You own a stock portfolio invested 15 percent in Stock Q, 15 percent in Stock R, 5 percent in Stock…

A: Portfolio Beta is a measure of the overall systematic risk of the portfolio of the investments.

Q: You own a stock portfolio invested 35 percent in Stock Q, 30 percent in Stock R, 20 percent in Stock…

A: given, wq= 0.35 wr= 0.3 ws= 0.2 wt= 0.15 betaq= 0.92 betar= 1.25 betas= 1.09 betat= 1.27

Q: A two-share portfolio held by an institutional investor has the following information: Years (t)…

A: To Find: Standard Deviation

Q: a. You expect an RFR of 10 percent and the market return (RM) of 14 percent. Compute the expected…

A: Part (a)RFR = 10%The market return, RM =  14%The expected return for a stock using CAPM equation is:…

Q: Suppose Wesley Publishing's stock has a volatility of 65%, while Addison Printing's stock has a…

A: For calculation of  the volatility (means standard deviation) of a portfolio's return, where the…

Q: You own a stock portfolio invested 34 percent in Stock Q, 18 percent in Stock R, 36 percent in Stock…

A: Calculation of portfolio beta: Excel workings:

Q: You are given the following information about a portfolio consisting of stocks X, Y, and Z: Stock…

A: The provided table is: Stock Investment Expected return X 10,000 8% Y 15,000 12% Z 25,000…

Q: You own a stock portfolio invested 25 percent in Stock Q, 20 percent in Stock R, 40 percent in Stock…

A: Portfolio Beta is the total of each stock weightage in the portfolio multiplied by the beta of each…

Q: Assume you have formed a portfolio of stocks by investing $200 in stock X, $300 in stock Y, and $500…

A: Beta factor can be defined as a measure of systematic risk of a security, that is, beta factor is a…

Q: Suppose instead of replacing Atteric Inc.’s stock with Baque Co.’s stock, Brandon considers…

A: Portfolio beta: Portfolio beta is the measure used to determine the systematic risk of a portfolio…

Q: You own a portfolio that has a total value of $215,000 and invested it is invested in Stock D with a…

A: Given: Total value of investment = $215,000 Stock D beta = 0.86 Stock E beta = 1.39

Q: What is the beta of your portfolio?

A: A Portfolio beta is an average beta calculated on the basis of the weightage of each investment.…

Risk and return

Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary. 

Capital Asset Pricing Model

Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.