Alex Sharpe portfolio provides an introduction to the Capital Asset Pricing Model (CAPM), portfolio diversification and risk management. Sharpe currently holds the Vanguard 500 Index Fund, but is considering an active management strategy. Students must assess the risk of the shares they considering their portfolio is. Students are provided with monthly stock returns and need to calculate the standard deviation of individual stocks and the portfolio if one of the stocks I … Read more »

Alex Sharpe portfolio provides an introduction to the Capital Asset Pricing Model (CAPM), portfolio diversification and risk management. Sharpe currently holds the Vanguard 500 Index Fund, but is considering an active management strategy. Students must assess the risk of the shares they considering their portfolio is. Students are provided with monthly stock returns and must use the standard deviations of the individual stocks and the portfolio if one of the stocks to calculate it added. Students must calculate the equity beta using regression and will learn that the beta appropriate measure of the risk to use in decision-making is not as risk-averse investors hold shares in isolation.
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Colette Southam
Source: Ivey Publishing
4 pages.
Release Date: 11 July 2008. Prod #: 908N20-PDF-ENG
Alex Sharpe portfolio HBR case solution

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