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Question 1: You invest in a portfolio of 5 stocks with an equal investment in each one. The betas of the 5 stocks are as
Question 1: You invest in a portfolio of 5 stocks with an equal investment in each one. The betas of the 5 stocks are as follows:.8,-1.3.95, 1.2 and 1.4. The risk-free return is 3% and the market return is 7%. 1. Compute the beta of the portfolio. 2. Compute the required return of the portfolio. Question 2: You are given the following probability distribution for a stock: Probability Outcome 5 -6% 5 18% 1. A) Compute the expected return. 2. B) Compute the standard deviation. 3. C) Compute the coefficient of variation
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