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(a) The table below includes information ABC Ltd, X Ltd and a portfolio of ABC and X. Calculate the missing figures (labelled A, B, C,
(a) The table below includes information ABC Ltd, X Ltd and a portfolio of ABC and X. Calculate the missing figures (labelled A, B, C, D and E) in the table below.
(b) Explain the benefit of investing in the portfolio in (a), rather than one of the individual companies.
(c) Write a brief interpretation of the beta for ABC and the beta for X.
Month | ABC | X | Portfolio |
Jan-20 | 1.4% | 1.0% | 1.1% |
Feb-20 | 1.7% | 5.0% | 4.0% |
March-20 | -52.7% | 40.0% | C |
April-20 | 37.6% | 1.0% | 12.0% |
May-20 | 20.41% | -3% | 4.0% |
Average Return | A | 8.8% | 6.7% |
Standard Deviation | B | 17.7% | D |
Portfolio weight | 30.0% | 70.0% | 100.0% |
Beta | 1.1 | -0.4 | E |
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