Consider risk measures on the following 3 large cap stocks: Stock Beta (B) Berkshire Hathaway (BRK)...
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Consider risk measures on the following 3 large cap stocks: Stock Beta (B) Berkshire Hathaway (BRK) 0.69 Apple (APPL) 1.15 Microsoft (MSFT) 1.28 Standard Deviation (6) 23.50% 27.00% 25.50% The standard deviation of the Market Portfolio OM= 18.0% a. Calculate the systematic and unsystematic risk of BRK, APPL and MSFT. b. What is BRK's covariance and correlation with the Market Portfolio's return? c. Calculate the following covariances: Cov(BRK, APPL), COV(BRK,MSFT), COV(APPL,MSFT) d. Consider an equally weighted portfolio of BRK and APPL. Calculate the portfolio's total risk (i.e. variance), systematic risk and unsystematic risk? Verify that o/P 1/2 - 10i. N² = e. Consider an equally weighted portfolio of all three stocks. Calculate the portfolio's total risk (i.e. variance), systematic risk and unsystematic risk? Verify that op What happens to unsystematic risk as the number of assets becomes very large? 2/10/i. N2 = Consider risk measures on the following 3 large cap stocks: Stock Beta (B) Berkshire Hathaway (BRK) 0.69 Apple (APPL) 1.15 Microsoft (MSFT) 1.28 Standard Deviation (6) 23.50% 27.00% 25.50% The standard deviation of the Market Portfolio OM= 18.0% a. Calculate the systematic and unsystematic risk of BRK, APPL and MSFT. b. What is BRK's covariance and correlation with the Market Portfolio's return? c. Calculate the following covariances: Cov(BRK, APPL), COV(BRK,MSFT), COV(APPL,MSFT) d. Consider an equally weighted portfolio of BRK and APPL. Calculate the portfolio's total risk (i.e. variance), systematic risk and unsystematic risk? Verify that o/P 1/2 - 10i. N² = e. Consider an equally weighted portfolio of all three stocks. Calculate the portfolio's total risk (i.e. variance), systematic risk and unsystematic risk? Verify that op What happens to unsystematic risk as the number of assets becomes very large? 2/10/i. N2 =
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Here are the calculations a Systematic Risk x m BRK 069 x 180 1242 APPL 115 x 180 2... View the full answer
Related Book For
Statistics For Business Decision Making And Analysis
ISBN: 9780321890269
2nd Edition
Authors: Robert Stine, Dean Foster
Posted Date:
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