Acc 291 Week 6 Portfolio Analysis Paper
PaperThis assignment needs to consist of a portfolio analysis in a Microsoft Word document that is not to exceed three pages. You must also include your portfolio analysis in either Word or Excel. You must show how you calculated the answers.
1. Select four stocks from finance.yahoo.com, google.finance.com, or moneycentral.msn.com. One should be a clothing manufacturer, one should be a retailer, one should be an automobile manufacturer, and one should be a restaurant or food producer.
2. Obtain the closing price, the change in price from the previous day, and the beta.
3. Calculate the return on holding the stock for a day (this should be the change in price over the closing price).
4. Calculate a portfolio return with weights of 0.25 for …show more content…
The influence of a systematic risk like inflation on a stock by using the beta coefficient. The beta coefficient, ß, tells us the response of the stock's return to a systematic risk. Beta measured the responsiveness of a security's return to a specific risk factor, the return on the market portfolio. The magnitude of the beta describes how great an impact a systematic risk has on a stock's returns. A beta of +1 indicates that the stocks return rises and falls one for one with the systematic factor. Thus, every stock will have a beta associated with each of these systematic risks: an inflation beta, a GNP beta, and an interest-rate …show more content…
Investment Portfolio
One basic assumption of portfolio theory is that as an investor you want to maximize the returns from your total set of investments for a given level of risk. The full spectrum of investments must be considered because the returns from all these investments interact, and this relationship among the returns for assets in the portfolio is important. Hence, a good portfolio is not simply a collection of individually good investments. There are several risks that are associated with the stocks and assets. So as to averse the risk the investor focuses on building up a diversified group of assets which helps in mitigating the risk of the total investment.
The total stock beta of the portfolio is 0.755 Company | Closing price | Change | Beta | Holding | Weight | Weighted beta | McDonalds | 77.56 | 0.43 | 0.53 | 0.33 | 0.25 | 0.1325 | Gap | 21.48 | 0.12 | 1.15 | 0.12 | 0.25 | 0.2875 | Wal Mart | 54.28 | 0.02 | 0.31 | 0.19 | 0.25 | 0.0775 | Honda | 37.88 | 0.68 | 1.03 | 0.4 | 0.25 | 0.2575 | | | | | | | 0.755 |
Capital Asset Pricing
1. Select four stocks from finance.yahoo.com, google.finance.com, or moneycentral.msn.com. One should be a clothing manufacturer, one should be a retailer, one should be an automobile manufacturer, and one should be a restaurant or food producer.
2. Obtain the closing price, the change in price from the previous day, and the beta.
3. Calculate the return on holding the stock for a day (this should be the change in price over the closing price).
4. Calculate a portfolio return with weights of 0.25 for …show more content…
The influence of a systematic risk like inflation on a stock by using the beta coefficient. The beta coefficient, ß, tells us the response of the stock's return to a systematic risk. Beta measured the responsiveness of a security's return to a specific risk factor, the return on the market portfolio. The magnitude of the beta describes how great an impact a systematic risk has on a stock's returns. A beta of +1 indicates that the stocks return rises and falls one for one with the systematic factor. Thus, every stock will have a beta associated with each of these systematic risks: an inflation beta, a GNP beta, and an interest-rate …show more content…
Investment Portfolio
One basic assumption of portfolio theory is that as an investor you want to maximize the returns from your total set of investments for a given level of risk. The full spectrum of investments must be considered because the returns from all these investments interact, and this relationship among the returns for assets in the portfolio is important. Hence, a good portfolio is not simply a collection of individually good investments. There are several risks that are associated with the stocks and assets. So as to averse the risk the investor focuses on building up a diversified group of assets which helps in mitigating the risk of the total investment.
The total stock beta of the portfolio is 0.755 Company | Closing price | Change | Beta | Holding | Weight | Weighted beta | McDonalds | 77.56 | 0.43 | 0.53 | 0.33 | 0.25 | 0.1325 | Gap | 21.48 | 0.12 | 1.15 | 0.12 | 0.25 | 0.2875 | Wal Mart | 54.28 | 0.02 | 0.31 | 0.19 | 0.25 | 0.0775 | Honda | 37.88 | 0.68 | 1.03 | 0.4 | 0.25 | 0.2575 | | | | | | | 0.755 |
Capital Asset Pricing