Business Homework Solutions
Problem
#53689

Average Retuern, Standard Deviation, Coefficient of Variation, and Beta

Part A The market portfolio is assumed to be composed of two securities, Investment X and Y as shown below. Determine based on the information given the Average return, Standard Deviation and Coefficient of Variation. Which is the better investment?

Year     Return X     Return Y
1997      16.5%        17.5%
1998      14.2%        13.2%
1999      13.5%        14.5%
2000      16.1%        15.1%
2001      12.2%        13.2%
2002      11.5%        10.5%

Part B A portfolio consists of five securities with following Beta and Proportions: What is the Beta of the portfolio?
Asset     Beta   Proportions
1           1.35         .1
2           1.12         .2
3           1.67         .3
4           1.04         .2
5           1.55         .2


Solution Summary

The solution calculates Average Retuern, Standard Deviation and  Coefficient of Variation of Investments and Beta of portfolio

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