Question
You are an analyst for Investment Corporation of Bangladesh (ICB) and you have been assigned the task of evaluating two different portfolio managers (Mr Ashik
You are an analyst for Investment Corporation of Bangladesh (ICB) and you have been assigned the task of evaluating two different portfolio managers (Mr Ashik and Mr Galib). You consider the following information to evaluate them
| Portfolio Manager | Portfolio name | Actual Average Return | Standard Deviation | Beta |
| Manager Ashik | Padma | 10.20% | 12.00% | 1.2 |
| Manager Galib | Meghna | 8.80% | 9.90% | 0.8 |
Additionally, you identify the risk premium for the DSE30 is 5.00 percent and the risk-free rate is currently 4.50 percent.
- Calculate the expected return using the CAPM for both portfolios (Padma and Meghna).
- Calculate alpha for both portfolios.
- Which portfolio has more total risk?
- Which portfolio has more market risk?
- Which firm has higher cost of equity capital?
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Lords Of Finance The Bankers Who Broke The World
Authors: Liaquat Ahamed
1st Edition
0143116800, 978-0143116806
