Beta Management Co.

A manager of a small investment company has been successful with index funds for limited market timing. Growth has allowed her to move in the stock selection. It is considering two small and highly variable listed shares, but is the risk that these investments could add it concerned “portfolio.” Provides an introduction to the CAPM. Students learn about the entire risk or non-diversifiable risk and portfolio (CAPM) beta, and calculate variability of the stocks separately and portfolio varianc … Read more »

A manager of a small investment company has been successful with index funds for limited market timing. Growth has allowed her to move in the stock selection. It is considering two small and highly variable listed shares, but is the risk that these investments could add it concerned “portfolio.” Provides an introduction to the CAPM. Students learn about the entire risk or non-diversifiable risk and portfolio (CAPM) beta, and calculate variability of the stocks separately and variance portfolio to see with and without the shares as an extremely risky (but low-beta) stock actually reduces the risk and calculate stock betas
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from
Michael E. Edleson
Source: HBS Premier Case Collection
5 pages.
Release Date: 23 March 1992. Prod #: 292122-PDF-ENG
Beta Management Co. HBR case solution