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Lisa is a graduate student from Holmes Institute who is actively involved in investment in the securities market. She had established one investment portfolio
Lisa is a graduate student from Holmes Institute who is actively involved in investment in the securities market. She had established one investment portfolio 5 years ago. Required: Lisa's portfolio has provided the rates of return of 16.6%, 17.2%, - 9.6%, 15.5% and 18.4% over the past five years, respectively. Calculate the geometric average return of the portfolio for this period? Assume that expected return of the stock A in Lisa's portfolio is 19.5%. The risk premium on the stocks of the same industry are 7.8%. The current Treasury Bond has the return rate of 7%. Calculate the beta of the stock using Capital Asset Pricing Model (CAPM)
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