Get 20% off StudyMode
Read full document

Klnl

  • By
  • April 2013
  • 784 Words
  • 62 Views
Page 1 of 3
The principal of 9,984.31 dollars was invested in my portfolio consisting of 7 securities from 6 different industries including telecommunications, retail, energy, etc. The beta targeted was 0.8 (0.78) to maintain a safe investment involving less risk. My risk-averse approach brought me the following results;

The Expected Return on my portfolio is;
EX RETURN = RF + BETA X RM – RF
= 0.0550 + 0.78 x 9.89 – 0.0550
(0.0550 = RF 1 YEAR US) (RM = 9.89 RETURN ON MARKET (1 YEAR DOW JONES INDEX)) = 8.20315 %
The portfolio Variance is 3.52
The portfolio Correlation is 0.88
The portfolio Standard Deviation is 12.37
The Treynor measure is 0
The Sharpe index is 1.74

The assets ranked in accordance to the geometric mean are as follows; SECURITY| WEIGHTAGE| TOTAL RETURN 1YR|
 | |  |
Telecommunication Services| 17.31%| 33.95%|
ROGERS COMMUNICATIONS INC| 17.31%| 33.95%|
Consumer Discretionary| 16.87%| 20%|
TARGET CORP| 16.87%| 20%|
Consumer Staples| 15.78%| 12%|
COCA-COLA CO| 15.78%| 12%|
Information Technology| 19.11%| 12%|
GOOGLE INC| 8.16%| 24%|
INTL BUSINESS MACHINES CORP| 10.95%| 4%|
Energy| 12.96%| 7%|
EXXON MOBIL CORP| 12.96%| 7%|
Financials| 17.96%| 2%|
TORONTO-DOMINION BANK| 17.96%| 2%|
Overall| 99.99%| 14.43%|

SECURITY| BETA| TREYNOR| SHARPE| STD DEV|
 |  |  |  |  |
Telecommunication Services| 0.58| 1| 2.6| 20.67|
ROGERS COMMUNICATIONS INC| 0.58| 1| 2.6| 20.67|
Consumer Discretionary| 0.53| 1| 1.68| 18.71|
TARGET CORP| 0.53| 1| 1.68| 18.71|
Consumer Staples| 0.84| 0| 1.13| 16.95|
COCA-COLA CO| 0.84| 0| 1.13| 16.95|
Information Technology| 0.98| 0| 0.98| 18.83|
GOOGLE INC| 0.91| 0| 1.55| 25.32|
INTL BUSINESS MACHINES CORP| 1.03| 0| 0.38| 19.48|
Energy| 1.03| 0| 0.63| 17.17|
EXXON MOBIL CORP| 1.03| 0| 0.63| 17.17|
Financials| 0.76| 0| 0.23| 16.9|
TORONTO-DOMINION BANK| 0.76|...