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You have a portfolio made up of 30 percent Target, 25 percent Netflix, and 45 percent Amazon. During the last year, Target earned -2.5%, Netflix earned 6%, and Amazon earned 12.5%. The betas for these companies are 0.33, .57, and 1.3 respectively.

A) Which company has the larger market risk and which one has the smaller market risk? Briefly explain.

B) What is the systematic risk for the overall portfolio?

C) The United States conducts a preventive strike on North Korea. What kind of event is this? Which stocks will be affected by this event? Briefly explain.

D) More video streaming companies enter the market. What kind of event is this? Which companies will be affected by this event? Briefly explain.

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92707891

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