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Expected return on portfolio; beta; riskier stock

You have the following information on the two securities in which you have invested
Expected Standard Security Amount
Return Probability Deviation Beta Invested
Kodak 15% .35 4.5% 1.20 $45,000
Xerox 12% .65 3.8% 0.98 $55,000

1) .. Which stock is riskier in a portfolio context? Which stock is riskier if you are not considering them in a portfolio? Explain. (5)

2) Compute the expected return on the portfolio. (5)

3) Compute the beta for the portfolio. (5)

4) Given the following information, Compute is the expected return on General Motors. (5)

Probability Expected Amount
Return Invested
0.2 -15 $5,000
0.3 20 8,000
0.4 25 10,000
0.1 40 15,000

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You have the following information on the two securities in which you have invested

Expected Return Probability Standard Deviation Security Beta Amount Invested
Kodak 15% 0.35 4.50% 1.2 $45,000
Xerox 12% 0.65 3.80% 0.98 $55,000

1)      .. Which stock is riskier in a portfolio ...

Solution Summary

This post shows how to calculate the expected return on the portfolio, the beta for the portfolio and the expected return on General Motors. It discusses about the riskier stock in a portfolio context

$2.19