Choose any 4 US listed stocks, (Apple Inc., Microsoft, Alphabet Inc. and Facebook ), and...
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Choose any 4 US listed stocks, (Apple Inc., Microsoft, Alphabet Inc. and Facebook ), and get their beta as listed under the Key Statistics section of Yahoo! Finance. Compute the expected return on an equally weighted portfolio of the 4 stocks as predicted by the Capital Asset Pricing Model (CAPM) using the current 3-month Treasury bill rate as the risk-free rate and the return on the S&P500 index from the past 10 years as the market return. To calculate market portfolio return, you need to solve for R, in the following equation:
S&P-10 (1+R)10 = S&Pnow (Hint: You need to calculate the portfolio beta).
Choose any 4 US listed stocks, (Apple Inc., Microsoft, Alphabet Inc. and Facebook ), and get their beta as listed under the Key Statistics section of Yahoo! Finance. Compute the expected return on an equally weighted portfolio of the 4 stocks as predicted by the Capital Asset Pricing Model (CAPM) using the current 3-month Treasury bill rate as the risk-free rate and the return on the S&P500 index from the past 10 years as the market return. To calculate market portfolio return, you need to solve for R, in the following equation:
S&P-10 (1+R)10 = S&Pnow (Hint: You need to calculate the portfolio beta).
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