Calculating a Portfolio's Beta

Journal of Economics and Finance Education, Forthcoming

11 Pages Posted: 2 Oct 2017  

John Levendis

Loyola University New Orleans

Mehmet F. Dicle

Loyola University New Orleans - Joseph A. Butt, S.J. College of Business; Research ATA, LLC

Date Written: September 25, 2017

Abstract

We present an active-learning computer exercise where students pick stocks for a portfolio. Using their selection of stocks, two different portfolios are created: 1) a portfolio that never rebalances and 2) a portfolio that continuously rebalances. They then calculate the rates of return and betas for their individual stocks and for their portfolios. The students are then asked to draw conclusions about the benefits of diversification which are shown to apply regardless of the specific type of rebalancing in a diversified portfolio.

Keywords: Portfolio, CAPM, Beta

JEL Classification: G10, G12

Suggested Citation

Levendis, John and Dicle, Mehmet F., Calculating a Portfolio's Beta (September 25, 2017). Journal of Economics and Finance Education, Forthcoming. Available at SSRN: https://ssrn.com/abstract=3042996

John Levendis

Loyola University New Orleans ( email )

6363 St. Charles Ave., box 15
New Orleans, LA 70118
United States

Mehmet F. Dicle (Contact Author)

Research ATA, LLC ( email )

Mandeville, LA 70448
United States

HOME PAGE: http://researchata.com

Loyola University New Orleans - Joseph A. Butt, S.J. College of Business ( email )

6363 St. Charles Avenue
New Orleans, LA 70118
United States

HOME PAGE: http://researchforprofit.com

Register to support our free research

Register

Paper statistics

Downloads
29
Abstract Views
107
PlumX