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Portfolio Return and Risk Analysis

Select four stocks from,, or One should be a clothing manufacturer, one should be a retailer, one should be an automobile manufacturer, and one should be a restaurant or food producer.

1. Obtain the closing price, the change in price from the previous day, and the beta.
2. Calculate the return on holding the stock for a day (this should be the change in price over the closing price without the change).
3. Calculate a portfolio return with weights of 0.25 for each stock.
4. Calculate a weighted beta with weights of 0.25 for each stock.
5. Summarize the implications of the portfolio return and risk with respect to what you learned about the beta and the CAPM.

Use a Microsoft Excel spreadsheet that illustrates your calculations. You may use the formulas embedded in Microsoft Excel and/or a financial calculator for these calculations.

Solution Summary

The following posting helps with problems involving portfolio return and risk analysis in an Excel spreadsheet.