Choose any 4 US listed stocks, (Apple,Johnson & Johnson (JNJ) , ,The Boeing Company, and...
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Choose any 4 US listed stocks, (Apple,Johnson & Johnson (JNJ) , ,The Boeing Company, 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,Johnson & Johnson (JNJ) , ,The Boeing Company, 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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