Question

Collette has four different stocks in her portfolio. She owns 79
shares of Stock A with a market price of $41.00, 137 shares of
Stock B which is currently at $66.00 per share, 163 shares of Stock
C which is listed at $87.00 per share, and 259 shares of Stock D,
with a price of $75.00 per share. If the betas and returns for the
four stocks are as follows, What is Collette ’s **portfolio
beta** and **portfolio return**?

Stock A Beta: 1.1 Return: 5%

Stock B Beta: .95 Return: 3%

Stock C Beta: 1.75 Return: 10%

Stock D Beta: 1.36 Return: 8%

Portfolio Beta:

Portfolio Return:

Answer #1

Total value(Shares*Market price) | beta | Return | |

A | (79*41)=$3239 | 1.1 | 5% |

B | (137*66)=$9042 | 0.95 | 3% |

C | (163*87)=$14181 | 1.75 | 10% |

D | (259*75)=$19425 | 1.36 | 8% |

Total=$45887 |

Portfolio return=Respective return*Respective investment weights

=(3239/45887*5)(9042/45887*3)+(14181/45887*10)+(19425/45887*8)

=**7.42%(Approx).**

Portfolio beta=Respective betas*Respective investment weights

=(3239/45887*1.1)+(9042/45887*0.95)+(14181/45887*1.75)+(19425/45887*1.36)

=**1.38(Approx).**

Ellen has three stocks in her portfolio. She owns 200 shares of
Stock A, currently selling at $28.00 per share, 150 shares of Stock
B, priced at $56.00 per share, and 75 shares of Stock C, which is
worth $36.00 per share. If the betas of the three stocks are as
follows, what is Ellen’s portfolio beta? ______________ Beta Stock
A 1.38 Stock B .96 Stock C 1.19

Cynthia has three stocks in her portfolio (details below).
Number of Shares
Current
Price
Beta
Return
Stock
A
75
120
1.1
9%
Stock
B
100
45
.95
7%
Stock
C
40
16
.70
5.5%
What is Cynthia’s portfolio beta? __________ What is her
portfolio return? __________

You own 500 shares of Stock A at a price of $60 per share, 405
shares of Stock B at $80 per share, and 500 shares of Stock C at
$41 per share. The betas for the stocks are .8, 1.8, and .7,
respectively. What is the beta of your portfolio? (Do not
round intermediate calculations. Round your answer to 2
decimalplaces.)
Beta

Maya Moore owns a portfolio with 2 stocks: Jump Shot and
Technical Foul. Information on these stocks is presented in the
table. The portfolio has a beta of 0.91. The expected return on the
market is 12.17 percent, the market risk premium is 9.63 percent,
and the risk-free rate is 2.54 percent. What is the beta of Jump
Shot? Round your answer to 2 decimal places (for example, 2.89,
0.70, or 1.00).
Stock
Shares
Share price
Beta
Jump Shot
1,400...

Elle holds a $10,000 portfolio that consists of four stocks. Her
investment in each stock, as well as each stock’s beta, is listed
in the following table:
Stock
Investment
Beta
Standard Deviation
Omni Consumer Products Co. (OCP)
$3,500
1.00
12.00%
Zaxatti Enterprises (ZE)
$2,000
1.30
11.00%
Water and Power Co. (WPC)
$1,500
1.10
20.00%
Flitcom Corp. (FC)
$3,000
0.40
19.50%
Suppose all stocks in Elle’s portfolio were equally weighted.
Which of these stocks would contribute the least market risk to...

Cheyenne holds a $5,000 portfolio that consists of four stocks.
Her investment in each stock, as well as each stock’s beta, is
listed in the following table:
Stock
Investment
Beta
Standard Deviation
Omni Consumer Products Co. (OCP)
$1,750
1.00
9.00%
Tobotics Inc. (TI)
$1,000
1.30
11.00%
Western Gas & Electric Co. (WGC)
$750
1.10
20.00%
Makissi Corp. (MC)
$1,500
0.30
19.50%
Suppose all stocks in Cheyenne’s portfolio were equally
weighted. Which of these stocks would contribute the least market
risk...

Elle holds a $10,000 portfolio that consists of four stocks. Her
investment in each stock, as well as each stock’s beta, is listed
in the following table
:
Stock
Investment
Beta
Standard Deviation
Omni Consumer Products Co. (OCP)
$3,500
1.00
9.00%
Tobotics Inc. (TI)
$2,000
1.50
11.50%
Three Waters Co. (TWC)
$1,500
1.15
20.00%
Mainway Toys Co. (MTC)
$3,000
0.30
22.50%
Suppose all stocks in Elle’s portfolio were equally weighted.
Which of these stocks would contribute the least market risk...

Cheyenne holds a $7,500 portfolio that consists of four stocks.
Her investment in each stock, as well as each stock’s beta, is
listed in the following table:
Stock
Investment
Beta
Standard Deviation
Andalusian Limited (AL)
$2,625
0.90
18.00%
Kulatsu Motors Co. (KMC)
$1,500
1.30
12.00%
Western Gas & Electric Co. (WGC)
$1,125
1.20
18.00%
Mainway Toys Co. (MTC)
$2,250
0.60
19.50%
Suppose all stocks in Cheyenne’s portfolio were equally
weighted. Which of these stocks would contribute the least market
risk...

Elle holds a $10,000 portfolio that consists of four stocks. Her
investment in each stock, as well as each stock’s beta, is listed
in the following table:
Stock Investment Beta Standard Deviation
Omni Consumer Products Co. (OCP) $3,500 0.90
15.00%
Kulatsu Motors Co. (KMC) $2,000 1.70 11.00%
Water and Power Co. (WPC) $1,500 1.10
18.00%
Mainway Toys Co. (MTC) $3,000 0.50
25.50%
Suppose all stocks in Elle’s portfolio were equally weighted.
Which...

. Portfolio risk and return
Emma holds a $5,000 portfolio that consists of four stocks. Her
investment in each stock, as well as each stock’s beta, is listed
in the following table:
Stock
Investment
Beta
Standard Deviation
Andalusian Limited (AL)
$1,750
0.90
12.00%
Tobotics Inc. (TI)
$1,000
1.30
12.00%
Water and Power Co. (WPC)
$750
1.20
18.00%
Makissi Corp. (MC)
$1,500
0.40
19.50%
Suppose all stocks in Emma’s portfolio were equally weighted.
Which of these stocks would contribute the least...

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