【正文】 2023 by The McGrawHill Companies, Inc. All rights reserved.1040The Formula for BetaClearly, your estimate of beta will depend upon your choice of a proxy for the market portfolio.McGrawHill/Irwin Copyright 169。 we can still identify the opportunity set of riskreturn binations of various portfolios.return?PIndividual AssetsMcGrawHill/Irwin Copyright 169。 2023 by The McGrawHill Companies, Inc. All rights reserved.1014 The Return and Risk for PortfoliosThe rate of return on the portfolio is a weighted average of the returns on the stocks and bonds in the portfolio: McGrawHill/Irwin Copyright 169。McGrawHill/Irwin Copyright 169。 2023 by The McGrawHill Companies, Inc. All rights reserved.1015 The Return and Risk for PortfoliosThe expected rate of return on the portfolio is a weighted average of the expected returns on the securities in the portfolio. McGrawHill/Irwin Copyright 169。 2023 by The McGrawHill Companies, Inc. All rights reserved.1025 The Efficient Set for Many SecuritiesGiven the opportunity set we can identify the minimum variance portfolio.return?Pminimum variance portfolioIndividual AssetsMcGrawHill/Irwin Copyright 169。 2023 by The McGrawHill Companies, Inc. All rights reserved.1041 Relationship between Risk and Expected Return (CAPM)? Expected Return on the Market:? Expected return on an individual security:Market Risk PremiumThis applies to individual securities held within welldiversified portfolios.McGrawHill/Irwin Copyright 169。 2023 by The McGrawHill Companies, Inc. All rights reserved.1039Estimates of b for Selected StocksStock BetaBank of America Borland International Travelers, Inc. Du Pont KimberlyClark Corp. Microsoft Green Mountain Power Homestake Mining Oracle, Inc. McGrawHill/Irwin Copyright 169。 2023 by The McGrawHill Companies, Inc. All rights reserved.1024 The Efficient Set for Many SecuritiesConsider a world with many risky assets。 2023 by The McGrawHill Companies, Inc. All rights reserved.1013 The Return and Risk for PortfoliosThe rate of return on the portfolio is a weighted average of the returns on the stocks and bonds in the portfolio: McGrawHill/Irwin Copyright 169。 2023 by The McGrawHill Companies, Inc. All rights reserved.100Chapter Outline Individual Securities Expected Return, Variance, and Covariance The Return and Risk for Portfolios The Efficient Set for Two Assets The Efficient Set for Many Securities Diversification: An Example Riskless Borrowing and Lending Market Equilibrium Relationship between Risk and Expected Return (CAPM) Summary and ConclusionsMcGrawHill/Irwin Copyright 169。 2023 by The McGrawHill Companies, Inc. All rights reserved.1016 The Return and Risk for