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Business
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Number of pages / Number of words: |
2 / 540 |
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If she purchased $200,000 of Vanguard she would be putting 99% into risk-free money market instruments and 1% in Vanguard giving the portfolio a standard deviation of 4.60%. Creating the portfolio with a purchase of $200,000 of Brown gives the highest standard deviation making it the most risky.
8.
Performing a regression analyses on CALREIT and Brown gave a market beta of 0...
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Brown has higher market risk but a lower standard deviation. Because unique risk can be diversified CALREIT has lower total risk. The portfolio with CALREIT has a lower standard deviation then the one with brown even though individually it has a higher standard deviation.
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