What are change in the return for shares


Response to the following problem:

Share A has a beta of 0.80, share B has a beta of 1.40, and share C has a beta of -0.30.

a. Rank these shares from the most risky to the least risky.

b. If the return on the market portfolio increases by 12%, what change in the return for each of the shares would you expect?

c. If the return on the market portfolio declines by 5%, what change in the return for each of the shares would you expect?

d. If you felt the shares market was about to experience a significant decline, which share would you be most likely to add to your portfolio? Why?

e. If you anticipated a major sharemarket rally, which share would you be most likely to add to your portfolio? Why?

 

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Portfolio Management: What are change in the return for shares
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