Required: a) Calculate the expected return on this portfolio. b) What is the Beta of this portfolio? c) Does this portfolio have more or less systematic risk than an average asset?

PFIN (with PFIN Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
6th Edition
ISBN:9781337117005
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Chapter12: Investing In Stocks And Bonds
Section: Chapter Questions
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Required: a) Calculate the expected return on this portfolio. b) What is the Beta of this portfolio? c) Does this portfolio have more or less systematic risk than an average asset?
QUESTION 2
Suppose you are a retiree. You are considering investing in buying shares but you do not
want to 'put all eggs in one basket'. Therefore, you are planning to invest in the following
different stocks.
Security
Stock A
Stock B
Stock C
Stock D
Amount invested Expected return Beta
N$
1,000
2,000
3,000
4,000
8%
12%
15%
18%
0.80
0.95
1.10
1.40
Transcribed Image Text:QUESTION 2 Suppose you are a retiree. You are considering investing in buying shares but you do not want to 'put all eggs in one basket'. Therefore, you are planning to invest in the following different stocks. Security Stock A Stock B Stock C Stock D Amount invested Expected return Beta N$ 1,000 2,000 3,000 4,000 8% 12% 15% 18% 0.80 0.95 1.10 1.40
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