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Return, Standard Deviation, Coefficient Of Variation, Beta

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The market portfolio is assumed to be composed of two securities, investment X and investment Y. Determine based on the information given the average return, standard deviation and coefficient 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%
2202 11.5% 10.5%

Part B

A portfolio consists of 5 securities with the 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

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Solution Summary

Solution answers 2 questions:
1) calculates average return, standard deviation and coefficient variation of two securities
2) calculates beta of a portfolio consisting of 5 securities

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