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You have heard that the latest in portfolio diversification is to invest in FANG stocks. FANG being the stocks of Facebook, Amazon, Netflix and Google.

You have heard that the latest in portfolio diversification is to invest in FANG stocks. FANG being the stocks of Facebook, Amazon, Netflix and Google.

From www.globeinvestor.com, find the current stock price of each of those four companies, and buy 50 shares of each companies for your portfolio.

Calculate the weighting of each company from your portfolio based on the market value in the investment in each of the four FANG.

Using a risk-free return of 2% and a stock market return of 6%, calculate the following:

  1. Weightings of each company on your portfolio (2 marks)
  2. Find the betas from each company using www.globeinvestor.com (2 marks)
  3. Expected return from each company based on CAPM (2 marks)
  4. Weighted Expected return of your portfolio (2 marks)
  5. Weighted Beta of the portfolio (2 marks)

Present your financial data in a table similar to Table 1 on the following page.

Company

Stock Symbol

Price per share

Number of shares

Market value of Holdings

Weights

Beta

Expected Return

Facebook

FB-Q

50

Amazon

AMZN-Q

50

Netflix

NFLX-Q

50

Alphabet

GOOGL-Q

50

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