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Compute portfolio return

Use the current stock prices from Sears, Google, and Ford motor company to make up a portfolio to invest in. Investments will be made of $100,000 into each company. Based on beta of each selected company and the proportion invested in each company, compute the portfolio beta. Based on the return (ROE) on each select company and the proportion invested in each company, compute portfolio return.

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Calculate portfolio beta and portfolio return
Use the current stock prices from Sears, Google, and Ford motor company to make up a portfolio to invest in. Investments will be made of $100,000 into each company. Based on beta of each selected company and the proportion invested in each company, compute the portfolio beta. Based on the return (ROE) on each select company and the proportion invested in each company, compute portfolio return.

Beta measures a stock's volatility, the degree to which its price fluctuates in relation to the overall market. In other words, it gives a sense of the stock's market risk compared to the greater market.
A beta of 1 indicates that the security's price tends to move with the market. A beta greater than 1 indicates that the security's price tends to be more volatile than the market, and a beta less than 1 means it tends to be less volatile than the market.
Many utility stocks have a beta of less than 1, and, conversely, many high-tech Nasdaq-listed stocks have a beta greater than 1.
Essentially, beta expresses the fundamental tradeoff between minimizing risk and maximizing return. Let's give an illustration. Say a company has a beta of 2. This means it is two times as volatile as the overall market. Let's say we expect the market to provide a return of 10% on an investment. We would expect the ...

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This provides the steps to calculate the compute portfolio return

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