leanne Lewis is attempting to evaluate two possible porttolios consisting ot the

Question

leanne Lewis is attempting to evaluate two possible porttolios consisting ot the same hve assets but held in ditterent proparhians She is particulany interested in using beta to compare the risk ot the portolias and, n this regard, has gathered the tollowing data a. Caiculate the betes for porttolios A and B b. Compare the risk of each portfolio to the market as well as to each other. Which portfolio is more risky? a.The beta of portfolio AsD (Round to three deornal places.) The beta of portiolio B is (Round to three decimal places.) b. Portfolio s sighty less risk than the mar el avera e risk while port lo s more risky than the market Portfol o s return will move more Ihan portfolio for a given increase or decrease in market risk Sele t om the drop-o n mens) Pliois the more rsky portelio (Selert trom the drop-dwn menu) i Data Table (Click on the icon kcaled un the lup-r ts contents int a spreadsheet) orre of lhe dala lable in order lo copy Portfolio Weights Asset Asset Beta Portfollo A Portfolio B 1.33 01.12 1.25 1 13 0.07 13% 26% 9% 15% 37% 100% 28% 5% 25% 15% 27% 100% Tolal Enter your answer In each of the answer boxes.

Explanation / Answer

Beta of A = 0.668

beta of B = 0.909

b. A, B, B, A

B

beta weight beta*weight 1.33 13.0% 0.1729 0.72 26.0% 0.1872 1.25 9.0% 0.1125 1.13 15.0% 0.1695 0.07 37.00% 0.0259

Related Questions

Navigate

• Browse (All)
• Browse L
• Subjects

---

---

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