Compute the expected returns and standard deviation of a portfolio
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Question 1:
The attached table contains a summary of (daily) data on two stocks and the market.
a) Compute the expected returns and standard deviation of a portfolio composed by 80% WMT and 20% MRK. Comment on your results.
b) Compute the beta for WMT and MRK.
c) Discuss total risk, diversifiable and undiversifiable risk for the two stocks, the portfolio - part a) above - and the market.
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Solution Summary
Discuss total risk, diversifiable and undiversifiable risk for the two stocks, the portfolio and the market.
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