Hi,
I have a doubt..i'm doing a project of portoflio management..kindly help...
I have collected the data for a stock and the BSE100 index monthly closing price for the past 36 months ie jan 2008 to dec 2010.I have calculated the beta by running the regression of monthly return on stock on the market return. Now i need to calculate the expected return,systematic risk,unsystematic risk ...
I'm confused on these points:-
1)To calculate the expected return,i am using simple the avg of the monthly return of the stock and similarly for the market return i.e. 1/36(sum of the returns from jan 2008 to dec 2010).Is it right???
2)To calculate the variance of the stock as well as for the market i'm simply using the function "variance" in the excel and data range is the return from jan 2008 to dec 2010.is it right???
plz reply urgently...
thanks