Question
You have joined PMS division of Motilal Oswal broking firm as a manager. Your job profile includes the manging portfolios of valuable clients. One of
You have joined PMS division of Motilal Oswal broking firm as a manager. Your job profile includes the manging portfolios of valuable clients. One of the clients is having four companies in his portfolio as per weights given below
Stock | Weights | Alpha | Systematic Risk(%) | Unsystematic Risk(%) |
HUL | 0.15 | 0.47 | 18.49 | 35 |
Axis Bank | 0.30 | 2.48 | 46.93 | 20 |
TCS | 0.25 | 1.02 | 27.56 | 40 |
Tata Motors | 0.30 | 1.27 | 56.25 | 50 |
Expected return from Nifty is 20 % and variance of its return is 25 percent square. Calculate the expected portfolio return and the portfolio risk using Sharpe's Single Index Model ( 15 MARKS)
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