Portfolio Analysis

Portfolio Analysis

In order to analyze the portfolio five top companies from Dow 30 index were chosen, these five companies include Wall Mart, Disney, General electric, Citigroup and Microsoft, portfolio analysis of these companies was calculated through using Sharpe, Jensen, and Treynor indices and then the result was compared with market data

Port folio Analysis of Wall Mart by Using Treynor , Jensen Index and Sharpe index

In order to analyze the portfolio the data of Wall Mart was gathered from authentic sources, this data include risk free rate which is 4.5% and it total return was 0.7562 of October 2012, its beta is 0.35, and using this data the portfolio analysis was done through

Wall Mart = (total return- risk free rate)/beta = (0.7562-0.045)/0.35

= 2.032

Wall Mart = (Total return- risk free rate) - {portfolio b* (market return - risk free rate)

= (0.7562-0.045) - 0.35(0.09-0.045)

= 0.7112 - 0.01575

=6.9%

Wall Mart = (0.7562 - 0.045) / 0.2 = 3.556

Port folio Analysis of Walt Disney by Using Treynor, Jensen and Sharpe index

In order to analyze the portfolio the data of Walt Disney was gathered from authentic sources, this data include risk free rate which is 5% and it total return was 0.8640 of October 2012, its beta is 0.28, and using this data the portfolio analysis was done through

Disney = (total return- risk free rate)/beta = (0.8640-0.05)/0.28

= 2.907

Disney = (Total return- risk free rate) - {portfolio b* (market return - risk free rate)

= (0.8640-0.05) - 0.28(0.1-0.05)

= 0.814 - 0.014

=0.8

Disney = (0.8640 - 0.05) / 0.15 = 5.42

Port folio Analysis of General Electric by Using Treynor, Jensen and Sharpe index

In order to analyze the portfolio the data of General Electric's was gathered from authentic sources, this data include risk free rate which is 3.5% and it total return was 0.6854 ...