Solution-Portfolio analysis, The stock with the lowest

Portfolio analysis

Assignment Help Portfolio Management

Reference no: EM13409

1. Is your portfolio balanced? Justify your answer.

2. What changes would you make, if any?

A high portfolio beta points that securities in the portflolio tend to be volatile in price movements than market as a whole.

Date	7/12/2013				- - - - - -	Week 1	- - - - - -
Stock Symbol	Company Name	Sector	Beta	Initial Investment	Starting Shares	Starting Price	Total as of Friday

AVNR	Avenir Pharmaceuticals	Biotech	0.84	$10,000.00	2,192.98	4.56	$9,999.99
GM	General Motors	Auto Industry	1.69	$10,000.00	274.73	36.4	$10,000.17
IAU	iShares Gold Trust	Financial	0.77	$10,000.00	801.92	12.47	$9,999.94
GE	General Electric	Industrial Goods	1.24	$10,000.00	420.88	23.76	$10,000.11
AAPL	Apple Inc.	Electronic	0.76	$10,000.00	23.45	426.51	$10,001.66
HD	Home Depot Inc.	Home Improvement	0.99	$10,000.00	124.16	80.54	$9,999.85
Facebook	Facebook,Inc	Technology	3.29	$10,000.00	385.95	25.91	$9,999.96
SBUX	Starbucks Corporation	Services	0.80	$10,000.00	143.43	69.72	$9,999.94
BAC	Bank of America Corporation	Financial	2.07	$10,000.00	725.69	13.78	$10,000.01
EBAY	eBay Inc.	Services	0.88	$10,000.00	175.32	57.04	$10,000.25
			Total	$100,000.00	5,268.51		$100,001.88

- - - - - -	Week 2	- - - - - -
Total Number of Shares	Closing Price on Friday	Total as of Friday

2,192.98	4.81	$10,548.23
274.73	36.61	$10,057.87
801.92	12.57	$10,080.13
420.88	24.72	$10,404.15
23.45	424.95	$9,965.08
124.16	79.89	$9,919.14
385.95	25.881	$9,988.77
143.43	68.79	$9,866.55
725.69	14.75	$10,703.93
175.32	52.185	$9,149.07
		$100,682.93

Week 3
Total Number of Shares	Closing Price on Friday	Total as of Friday

2,192.98	4.70	$ 10,307.01
274.73	36.67	$ 10,074.35
801.92	12.95	$ 10,384.86
420.88	24.65	$ 10,374.69
23.45	440.99	$ 10,341.22
124.16	78.74	$ 9,776.36
385.95	34.01	$ 13,126.16
143.43	73.36	$ 10,522.02
725.69	14.73	$ 10,689.41
175.32	52.25	$ 9,160.47
		$ 104,756.55

Week 4
Total Number of Shares	Closing Price on Friday	Total as of Friday

2,192.98	4.89	$ 10,723.67
274.73	36.95	$ 10,151.27
801.92	12.70	$ 10,184.38
420.88	24.70	$ 10,395.74
23.45	462.54	$ 10,846.56
124.16	80.23	$ 9,961.36
385.95	38.05	$ 14,685.40
143.43	74.23	$ 10,646.81
725.69	14.84	$ 10,769.24
175.32	52.54	$ 9,211.31
		$ 107,575.74

Week 5
Total Number of Shares	Closing Price on Friday	Total as of Friday

2,192.98	4.40	$ 9,649.11
274.73	36.02	$ 9,895.77
801.92	12.75	$ 10,224.48
420.88	24.25	$ 10,206.34
23.45	454.45	$ 10,656.85
124.16	78.97	$ 9,804.92
385.95	38.50	$ 14,859.08
143.43	72.80	$ 10,441.70
725.69	14.45	$ 10,486.22
175.32	53.33	$ 9,349.82
		$ 105,574.29

The stock with the lowest beta (0.76) is Apple Inc. stock. The stock with the highest beta (3.29) is Facebook Inc. stock. Beta for Apple Inc. stock is less that 1, it tells us that stock price is less volatile and risky than market.

While beta for Facebook Inc. stock is more than 1, it indicate that stock price is more volatile and risky than overall market. Looking at the performance of these stock with my initial investment of $10,000 for each stock, I can tell that Facebook Inc. stock have higher earning than Apple Inc. stock. So, with more risky securities, such as Facebook Inc. in my case, investor can expect a higher return than for the Apple securities which are less risky.

Reference no: EM13409

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