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Unformatted text preview: deviation? 2. Suppose you decide to invest 99% in the index fund and 1% in one individual stock. Calculate the variability of this portfolio first using the REIT as the individual stock and then using Brown Group as the individual stock. Which stock appears to be the riskiest in this portfolio context? Explain how this makes sense given your answer to question 1 above. 3. Perform a regression of each stock’s monthly returns on the Index returns to compute a “beta” for each individual stock. How do the betas help you to interpret the results in question 2 above?...
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- Spring '09