Question
You own a portfolio consisting of the following stocks: Percentage of Portfolio, Beta, Expected Return 1. 5% 1.20 14%, 2. 25 0.65, 10, 3. 15
You own a portfolio consisting of the following stocks: Percentage of Portfolio, Beta, Expected Return 1. 5% 1.20 14%, 2. 25 0.65, 10, 3. 15 1.00 12, 4. 20 1.4 16, 5. 35 0.90 11. The risk-free rate is 3 percent. Also, the expected return on the market portfolio is 13.8 percent. Calculate the expected return of your portfolio. Calculate the portfolio beta,Given the information above plot the security market line in below. Plot individual stocks and your portfolio on this graph. Please label everything. , From your plot in part (c), which stocks appear to be your winners and which ones appear to be losers? __________________________________________________________________ Why should you consider your conclusion in part (d) to be less than certain?
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