Portfolio return and beta Personal Finance Problem Jamie Peters invested $113,000 to set up the following portfolio one year ago: a. Calculate the portfolio beta on the basis of the original cost figures. b. Calculate the percentage return of each asset in the portfolio for the year. c. Calculate the percentage return of the portfolio on the basis of original cost, using income and gains during the year. d. At the time Jamie made his investments, investors were estimating that the market return for the coming year would be 10%. The estimate of the risk-free rate of return averaged 3% for the coming year. Calculate an expected rate of return for each stock on the basis of its beta and the expectations of market and risk-free returns. e. On the basis of the actual results, each stock in the portfolio performed differently relative to those CAPM-generated expectations of performance. What factors could explain these differences? a. The portfolio beta on the basis of the original cost figures is (Round to two decimal places.) Data Table b. The percentage return for asset A for the year is %. (Round to two decimal places.) The percentage return for asset B for the year is %. (Round to two decimal places.) (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) The percentage return for asset C for the year is %. (Round to two decimal places.) The percentage return for asset D for the year is%. (Round to two decimal places.) Asset B D Cost $24,000 $35,000 $38,000 $16,000 Beta at purchase 0.72 0.93 1.59 1.29 Yearly income $1,600 $1,300 $0 $475 Value today $24.000 $36.000 $44,500 $16,500 c. The percentage return of the portfolio on the basis of original cost, using income and gains during the year is %. Click to select your answer(s). Portfolio return and beta Personal Finance Problem Jamie Peters invested 5113.000 to set up the following pool one year ago a. Calculate the porti bet on the basis of the original congres b. Calculate the percentage return of each in the portfolo for the year Calculate the percentage retom of the portfolio on the basis of original cos, using income and gain during the year d. At the time Jamie made his investments, investors were stimating that the market return for the coming year would be 10%. The estimate of the risk to rate of return verged for the coming your Calculate an expected rate of return for each stock on the basis of its beta and the expectations of market and risk free returns e. On the basis of the actual results, each stock in the portfolio performed derely relative to those CAPM generated expectations of performance. What factions could explain these differences? .. The portfolio bita on the basis of the original cost figures is (Round to two decimal place) Data Tate - X b. The percentage retum for set for the year is (Round to two decimal places) The percentage return for asset for the year in % (Round to two decimal places) (Click on the con located on the top comer of the datatable below in order to copy its contents The percentage return for asset for the year is Round to two decimal places) spreadsheet Asset Cost Bata at purchase Yearly Income The percentage retum for asset for the year is Round to two decimal places) Vole today 524000 51 600 524000 B 535000 090 51300 $36.000 c. The percentage retom of the portfolio on the basis of original cost using income and gains during the year is 538.000 159 50 544 500 $16.000 129 $475 $16.500 Cack to select your answers Done
