Alex Sharpe's Portfolio provide an prologue to the Capital Asset Pricing Model (CAPM), portfolio diversification and risk management. Sharpe presently holds the Vanguard 500 Index Fund, but is contemplating a management strategy that is more active. Students must assess the threat of both stocks she is contemplating adding to her portfolio.
Students are provided with monthly stock returns and must calculate the standard deviations of the individual stocks and of the portfolios when one of the stocks is added to it. Pupils will learn that beta is the proper measure of danger to use in decision and must compute the stock's beta using regression -averse investors do not hold stocks in isolation.
PUBLICATION DATE: July 11, 2008 PRODUCT #: 908N20-HCB-ENG
This is just an excerpt. This case is about FINANCE & ACCOUNTING
Related Case Solutions & Analyses:
Strategies to reduce Product Proliferation
American Well: The Doctor Will E-See You Now
Darlarna Furniture Ltd.
Race Accountability and the Achievement Gap (A)
MGM Mirage
Bohemian Crowns: Ceskoslovenska Obchodni Banka (A)
Yus Tin Sing Enterprises: Proactive Risk and Crisis Management
Decision-Making in High-Tech Firms: Perspectives of Three Executives
Computer Power Group: Designing Brand Architecture
Arch Communications Group, Inc.
