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Homework answers / question archive / Draw distinctions between 'Standard Deviation' and 'Beta' as measures of risk
Draw distinctions between 'Standard Deviation' and 'Beta' as measures of risk.
Suppose you have invested Rs.1,00,000 in the following four stocks:
Stock Amount of Investment
(Rs.)
Beta Variance
A 10,000 1.20 15%
B 40,000 0.95 10%
C 20,000 1.10 12%
D 30,000 1.50 18%
The risk free rate is 6.5% per annum and the expected return on the market portfolio is
12.5%. What is the expected return on your portfolio? What is portfolio systematic risk?
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