Question

Questiion: Compare the expected returns that you computed for each security with the published 52-week change. What do you notice? Are these stocks performing as well as expected?

Apple 52-week change= 46.99%, 52-Week change for the S&P= 21.90%

Amazon 52-week change= 57.67%, 52-week change for the S&P= 22.03%

Unit 4 Discussion Table
Complete the required information in the table.
Stock Symbol	% of portfolio	Beta	Contribution to portfolio Beta	Expected Return (using CAPM)	Contribution to Portfolio Return
Apple	50%	1.31	0.5*1.31= 0.655	5.64+(21.9-5.64) *1.31= 26.94%	0.5 * 26.94 = 13.47%
Amazon	50%	1.34	0.5*1.34=0.670	5.64+(22.03-5.64) *1.34= 27.60%	0.5 * 27.60 = 13.80%
Portfolio Beta			0.655 + 0.670 = 1.3250	Portfolio Return	0.5 * 26.94 + 0.5 * 27.60 = 27.27%

Answer 1