Gitman: Principl Manageri Finance_15 (15th Edition) (What's New in Finance)
15th Edition
ISBN: 9780134476315
Author: Chad J. Zutter, Scott B. Smart
Publisher: PEARSON
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Question
Chapter 8, Problem 8.23P
a)
Summary Introduction
To discuss:
Calculation of portfolio beta.
Introduction:
Beta is an indicator of the risk tha measures the systematic risk of a risky investment by comparing the risky investment with the average risky asset in the market.
b)
Summary Introduction
To discuss:
Riskiness.
Introduction:
Beta is an indicator of the risk tha measures the systematic risk of a risky investment by comparing the risky investment with the average risky asset in the market.
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Jason Jackson is attempting to evaluate two possible portfolios consisting of the same five assets but held in different proportions. He is particularly interested in using beta to compare the risk of the portfolios and, in this regard, has gathered the following data:
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.
a. Calculate the betas for portfolios A and B.
b. Compare the risk of each portfolio to the market as well as to each other. Which portfolio is more risky?
Question content area bottom
Part 1
Data table
(Click on the icon here
in order to copy its contents of the data table below into a spreadsheet.)
Portfolio Weights
Asset
Asset Beta
Portfolio A
Portfolio B
1
1.35
17%
29%
2
0.69
26%
8%
3
1.24
10%
22%
4
1.06
11%
20%
5
0.87
36%
21%
Total
100%
100%
a. The beta of portfolio A is
enter your response here.
(Round to three…
9.2- Use the diagrams to answer the question
q2-
This question relates to Diagram 5 from the Online Quiz 9.2 diagrams, which shows four different feasible portfolios plotted on a set of risk/return axes.
Which portfolio would a risk-averse investor prefer - Portfolio A or Portfolio G?
Select one:
a.
Portfolio A.
b.
Portfolio G.
c.
The investor would be indifferent between the two portfolios.
d.
We cannot tell without more information about the investors attitude towards risk (i.e. how risk-averse the investor is).
Use attachments to answer questions
This question relates to Diagram 5 from the 9.2 diagrams, which shows four different feasible portfolios plotted on a set of risk/return axes.
Which portfolio would a risk-averse investor prefer - Portfolio A or Portfolio G?
Select one:
a.
Portfolio A.
b.
Portfolio G.
c.
The investor would be indifferent between the two portfolios.
d.
We cannot tell without more information about the investors attitude towards risk (i.e. how risk-averse the investor is).
Chapter 8 Solutions
Gitman: Principl Manageri Finance_15 (15th Edition) (What's New in Finance)
Ch. 8.1 - What is risk in the context of financial decision...Ch. 8.1 - Prob. 8.2RQCh. 8.1 - Compare the following risk preferences: (a) risk...Ch. 8.2 - Explain how the range is used in scenario...Ch. 8.2 - Prob. 8.5RQCh. 8.2 - Prob. 8.6RQCh. 8.2 - What does the coefficient of variation reveal...Ch. 8.3 - What is an efficient portfolio? How can the return...Ch. 8.3 - Prob. 8.9RQCh. 8.3 - How does international diversification enhance...
Ch. 8.4 - Prob. 8.11RQCh. 8.4 - Prob. 8.12RQCh. 8.4 - Prob. 8.13RQCh. 8.4 - What impact would the following changes have on...Ch. 8 - Prob. 1ORCh. 8 - Prob. 8.1STPCh. 8 - Prob. 8.2STPCh. 8 - Prob. 8.1WUECh. 8 - Prob. 8.2WUECh. 8 - Prob. 8.3WUECh. 8 - Prob. 8.4WUECh. 8 - Prob. 8.5WUECh. 8 - Prob. 8.6WUECh. 8 - Prob. 8.1PCh. 8 - Prob. 8.2PCh. 8 - Prob. 8.3PCh. 8 - Prob. 8.4PCh. 8 - Prob. 8.5PCh. 8 - Learning Goal 2 P8-6 Bar charts and risk Swans...Ch. 8 - Prob. 8.7PCh. 8 - Prob. 8.8PCh. 8 - Prob. 8.9PCh. 8 - Prob. 8.10PCh. 8 - Prob. 8.11PCh. 8 - Prob. 8.12PCh. 8 - Prob. 8.13PCh. 8 - Prob. 8.14PCh. 8 - Learning Goal 4 P8- 15 Correlation, risk, and...Ch. 8 - Prob. 8.16PCh. 8 - Learning Goal 5 P8- 17 Total, nondiversifiable,...Ch. 8 - Prob. 8.18PCh. 8 - Prob. 8.19PCh. 8 - Prob. 8.20PCh. 8 - Prob. 8.21PCh. 8 - Prob. 8.22PCh. 8 - Prob. 8.23PCh. 8 - Prob. 8.24PCh. 8 - Prob. 8.25PCh. 8 - Prob. 8.26PCh. 8 - Prob. 8.27PCh. 8 - Learning Goal 6 P8- 28 Security market line (SML)...Ch. 8 - Prob. 8.29PCh. 8 - Prob. 8.30PCh. 8 - Prob. 8.31PCh. 8 - Spreadsheet Exercise Jane is considering investing...
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