FIN 402 Week 2 Assignment Case Problem 13.1 Assessing the Stalchecks ’ s Portfolio Performance ( Part a , b , c , d )
you give Susan about the inherited portfolio ? Explain the steps she should take to adjust the portfolio to her needs .
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FIN 402 Week 2 Assignment Case Problem 13.1 Assessing the Stalchecks ’ s Portfolio Performance ( Part a , b , c , d )
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Case Problem 13.1 Assessing the Stalchecks ’ s Portfolio Performance Mary and Nick Stalcheck have an investment portfolio containing four investments . It was developed to provide them with a balance between current income and capital appreciation . Rather than acquire mutual fund shares or diversify within a given class of investments , they developed their portfolio with the idea of diversifying across various asset classes . The portfolio currently contains common stock , industrial bonds , mutual fund shares , and options . They acquired each of these investments during the past three years , and they plan to purchase other investments sometime in the future . Currently , the Stalchecks are interested in measuring the return on their investment and assessing how well they have done relative to the market . They hope that the return earned over the past calendar year is in excess of what they would have earned by investing in a portfolio consisting of the S & P 500 Stock Composite Index . Their research has indicated that the risk-free rate was 7.2 % and that the ( before-tax ) return on the S & P 500 portfolio was 10.1 % during the past year . With the aid of a friend , they have been able to estimate the beta of their portfolio , which was 1.20 . In their analysis , they have planned to ignore taxes because they feel their earnings have been adequately sheltered . Because they did not make any portfolio transactions during the past