Portfolio Return and Risk Analysis
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.
1. Obtain the closing price, the change in price from the
previous day, and the beta.
2. Calculate the return on holding the stock for a day (this
should be the change in price over the closing price without the change).
3. Calculate a portfolio return with weights of 0.25 for
each stock.
4. Calculate a weighted beta with weights of 0.25 for each
stock.
5. Summarize the implications of the portfolio return and
risk with respect to what you learned about the beta and the CAPM.
Use a Microsoft Excel spreadsheet that illustrates your calculations. You may use the formulas embedded in Microsoft Excel and/or a financial calculator for these calculations.
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