1. Using Market Insight at www.mhhe.com/edumarketinsight, find the monthly rates of return over a 2-year period for...

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1. Using Market Insight at www.mhhe.com/edumarketinsight, find the monthly rates of return over a 2-year period for five companies of your choice. Now assume you form an equally weighted portfolio of the five firms (i.e., a portfolio with equal investments in each firm). What is the rate of return each month on your portfolio? Compare the standard deviation of the monthly portfolio return to that of each firm and to the average standard deviation across the five firms. What do you conclude about portfolio diversification?

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Fundamentals Of Corporate Finance

ISBN: 9780073382302

6th Edition

Authors: Richard A Brealey, Stewart C Myers, Alan J Marcus

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