Question

I have a portfolio of 56 stocks with varying weights. My
particular stock holds a weight of **1/56**.

Please walk me through the steps of how to calculate the:

1) 5 year beta of my stock with the portfolio

2) 5 year beta of my stock with the S&P 500

3) 5 year beta of the portfolio with the S&P 500

Answer #1

The formula to calculate beta is:

In order to calculate beta in excel, the following steps can be followed:

- You would need daily historical returns of both the benchmark, whether it is the portfolio or S&P 500, and the individual stock for the past 5 years. They can be arranged in 2 columns side by side.
- Next step is to calculate covariance between daily returns of the individual stock and the benchmark and the variance of daily returns of the benchmark. Dividing the covariance by variance will give you the beta of individual stock with respect to the benchmark.

As an example, computation of beta of Tesla with respect of S&P 500 would look like this:

You have a portfolio made up of 4 stocks. Stock W, with a weight
of 10%, has an expected return of 6%. Stock X, with a weight of
20%, has an expected return of 23%. Stocks Y and Z each have
weights of 35% and expected returns of 3% and 19% respectively.
What is the expected return of your portfolio? Write the expected
return in percent form, round to two decimal places.
(Please show all steps and equation used if...

I have an excel spreadsheet with a list of stocks and their
adjusted closing prices from 1/1/2014 to 1/1/2019.
Assuming I create a portfolio of $10M that is equally weighted,
please walk me through how to calculate the five year total return
of the portfolio. Also, please explain how I can calculate the
volatility (sigma squared) during the time frame.

An investor currently holds the following portfolio of 4 stocks,
each having equal weight:
Stock Expected Return (rs) Beta
A 13.2% 1.70
B 12.00% 1.5
C 6.0% 0.5
D 7.8% 0.8
a. What is the portfolio’s expected return?
b. What is the portfolio’s beta risk? Is it more or less risky
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c. Is the portfolio more or less risky than the market? How do
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The investor is not comfortable with holding a portfolio that
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The beta of four stocks --P, Q, R, and S --are 0.44, 0.73,
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with the following weights in each asset?
Weight in Stock P Weight in Stock Q
Weight in Stock R Weight in Stock S
Portfolio 1 25% 25% 25% 25%
Portfolio 2 30% 40% 20% 10%
Portfolio 3 10% 20% 40% 30%

Beta of a
portfolio. The beta of four
stocks—G, H, I, and J—are 0.48, 0.86, 1.25, and 1.53,
respectively. What is the beta of a portfolio with the following
weights in each asset?
Weight in
Stock G
Weight in
Stock H
Weight in
Stock I
Weight in
Stock J
Portfolio 1
25%
25%
25%
25%
Portfolio 2
30%
40%
20%
10%
Portfolio 3
10%
20%
40%
30%
What is the beta of portfolio 1? _____(Round to two decimal
places.)
What...

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20%, has an expected return of 19%. Stocks Y and Z each have
weights of 35% and expected returns of 4% and 12% respectively.
What is the expected return of your portfolio?
Write the expected return in percent form, round to two decimal
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The table below shows a portfolio of stocks.
1. Stock
2.
Total Value
3.
Weight
Stock Return
Recession
(60%)
Normal
(40%)
MRK
$ 4,600
15%
10%
VZ
$ 4,400
1%
15%
AAPL
$ 7,500
8%
18%
CAT
$ 2,500
-2%
5%
FDX
$ 1,000
3%
12%
Using the information on the table, perform the following tasks.
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Stocks X and Y have the following probability distributions of
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Probability
Stock X
Stock Y
0.15
-5%
-8%
0.35
7%
10%
0.30
15%
18%
0.20
10%
25%
Expected return
Standard deviation
6.42%
Correlation between Stock X and Stock Y
0.8996
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Beta
Standard Deviation
A
18%
1.4
25%
B
12%
0.6
16%
The expected return on the market portfolio is 7% and the risk
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As a stock portfolio manager, you have investments in many U.S.
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