From only the R_avg and stdev it seem R_Avg 6.89% 22.50% 14.21% riskier with higher stdev but has highe Stdev 12.48% 32.45% 28.11% return. However, assuming that 1% is invested R_PORTFOLIO_AVG 7.05% 6.97% them, the portfolio risk is lower in case Reynolds as compared to Hasbro and t R_PORTFOLIO_STDEV 12.51% 12.60% return is higher with Reynolds in portfo Assuming 99% investment in S&P and 1% investment in Reynolds or Hasbro
Beta with Reynolds is lower than 1 me
S&P 500, REYNOLDS S&P 500, HASBRO greatly affected by market change. Has COVARIANCE 0.0009385487 0.0018111143 as its beta is greater than 1 which mea market rises it will rise rapidly but conv BETA 0.7235003192 1.396136128 market drops it will drop rapidly too.
REQUIRED RATE OF RETURN
Assume market risk premium 6.00% Risk free rate 0.89% Again shows Hasbro is riskier and henc S&P 500, REYNOLDS 5.23% rate of return is higher S&P 500, HASBRO 9.27%
REYNOLDS IS LESS RISKIER INVESTMENT. ALEX SHOULD PICK IT
R_avg and stdev it seems Reynolds is gher stdev but has higher rate of
uming that 1% is invested in either of
tfolio risk is lower in case with ompared to Hasbro and the rate of er with Reynolds in portfolio
nolds is lower than 1 meaning its not
ed by market change. Hasbro is riskier reater than 1 which means that when will rise rapidly but conversly as it will drop rapidly too.