Solution-Compute the expected return of portfolio

Compute the expected return of portfolio

Reference no: EM133070475

You are a financial investor who actively buys and sells in the securities market. Now you have a portfolio, including four shares: $7,500 of Share A, $4,800 of Share B, $5,700 of Share C, and $2,500 of Share D.

Required:

Compute the weights of the assets in your portfolio?
If your portfolio has provided you with returns of 7.7%, 10.5%, - 8.7% and 14.2% over the past four years, respectively. Calculate the geometric average return of the portfolio for this period?
Assume that expected return of the stock A in your portfolio is 13.2%. The risk premium on the stocks of the same industry are 6.8%, beta of this stock is 1.3. Calculate the risk-free rate of return using Capital market pricing model (CAPM)?
You have another portfolio that comprises of two shares only: $500 Tesla shares and $700 Eagle shares. Below is the data of your portfolio:

	Tesla	Eagle
Expected return	13%	20%
Standard Deviation of return	20%	45%
Correlation of coefficient (p)	0.4

Compute the expected return of your portfolio.

Compute the expected risk (standard deviation) of the portfolio.

Reference no: EM133070475

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Compute the expected return of portfolio

Reference no: EM133070475

Reference no: EM133070475

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