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Essay Instructions: Analyze stock portfolio. stocks were selected randomly without knowledge of finance and investments. how did portfolio perform? who is the winner, who is the loser/ compare to DJI index performance. what approach and factors( beta, risk, return) would you consider if you had to choose stocks after completion of investments course
There are faxes for this order.

Essay Instructions: Using Yahoo finance, find the beta for CSX Railroad; write a two page paper discussing the following:

A.) What is the estimated beta coefficient of CSX? What does this beta mean in terms of CSX to include them in my overall portfolio.

B.) Given the beta of CSX, the present yield to maturity on US government bonds maturing in one year(currently about 4.5% annually) and an assessment that the market risk premium (that is - the difference between the expected rate of return on the 'market portfolio' and the risk free rate of interest) is 6.5%, use the CAPM equation in order to find out what is the present 'cost of equity' of CSX? Explain what is the meaning of the 'cost of equity'.

C.) Look up the beta for McDonald's and Wal Mart and report their betas. Suppose I invest one third of my money in each of the stocks of these companies, What will the beta of the portfolio be? Given the data in (B), what will the expected rate of return on this portfolio be? Do you feel that the three-stock portfolio is sufficiently diversified or does it still have risk that can be diversified away? Explain.

Two page report, explain the answers throughly with references to the background materials. Demonstrate a strong understanding of the concept of beta and the risk/return trade off.

Essay Instructions: a brief analysis providing details about the stock tat i invested, and overall investment strategy and performance of the stock portfolio, and how the stocks was impacted by macroeconomic conditions.

i will email you the stock portfolio.

Essay Instructions: 1. For each of the scenarios below, explain whether or not it represents a diversifiable or undiversifiable risk. Explain your reasoning

a. It is announced that a company is under investigation from the federal government for fraudulent accounting practices.

b. A major terrorist attack occurs in the U.S. again.

c. A large increase in the price of oil.

d. The CEO of a major corporation is involved in a sex scandal.



2. Use the CAPM to answer the following questions:

a. Find the Expected Return on the Market Portfolio given that the Expected Return on Asset I is 5%, the Risk-Free Rate is 2%, and the Beta for Asset I is 1.5.

b. Find the Risk-Free Rate given that the Expected Return on Asset i is 12.5%, the Expected Return on the Market Portfolio is 7%, and the Beta for Asset i is 2.

c. What will happen to the Beta of a diversified stock portfolio as more stocks are added to it? Explain your reasoning.



3. In one page or more, explain what you think are both the major drawbacks and advantages of using the CAPM.