Betas, Portfolios, and Portfolio Betas 1) Choose five stocks--any stocks that yo

Question

Betas, Portfolios, and Portfolio Betas

1) Choose five stocks--any stocks that you find interesting. List the company, the ticker symbol, and the percentage of your total portfolio that this stock makes up.

2) Find and report the beta for each of the stocks in your portfolio. Discuss what the beta of each stock means for that company.

3) Calculate the portfolio beta and discuss what it means. Based on the betas of each stock, which stocks might you choose to invest more heavily in and why?

Please organize your case for each section so I can easily see which part you are answering.

Explanation / Answer

1) 2) Stock Symbol Beta % of invesment Beta Meaning Beta *% of investment Facebook, Inc FB 0.96 20% 4% less volative than market 0.192 Amazon.com, Inc AMZN 1.18 20% 18% more volative than market 0.236 Groupon, Inc. GRPN 1.56 20% 56% more volative than market 0.312 Microsoft Corporation MSFT 1.22 20% 22% more volative than market 0.244 Alibaba Group Holding Limited BABA 1.1 20% 10% more volative than market 0.22 3) BETA OF THE PORTFOLIO 1.20 3) The portfolio is 20% more volatile than the market, if an investor expects more return and his risk appetite is more then he should invest more in groupon inc as it has the maximum beta in the portfoilio generally companies with higher beta is expected to yield higher return.

Related Questions

Navigate

• Browse (All)
• Browse B
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.