Expected Return, Systematic Risk, Non-Systematic Risk

Expected return, systematic risk, non-systematic risk and total risk. MS stockIntercept0.000181Beta 0.204482Mean market return QUOTE ) QUOTE m0.007904Market variance (volatility)0.006634Expected returnE( QUOTE ) QUOTE 0.001797Systematic risk0.00027717.1Non-systematic risk0.00134682.9Total risk-------0.001623100.0 Capita PLC stockIntercept 0.001316Beta 0.028415Mean market return QUOTE ) QUOTE m0.003712Market variance (volatility) 0.012296Expected returnE( QUOTE ) QUOTE 0.001422Systematic risk 0.0000100.6Non-systematic risk 0.00161899.4Total risk-------0.001628100.0 Note that your comments should relate to risks and diversification. Then a short paragraph of comment is enough. Unsymmetrical risk (specific risk) can be reduced through diversification. From above given risk analysis, beta measures volatility of a security or portfolio in relation to the market condition. Alternatively, the coefficient relates a stock to the overall market environment. From MS stock and Capita PLC, stock the value of Beta is less than 1. This implies that both securities will be less volatile in relation to the market. Consequently, both stocks have near equal volatilities. However, MS stock exhibit a higher value of beta and therefore a suitable option for investment. An investor expecting the concerned market to be bullish may opt for the MS stocks. Alternatively, an investor expecting the market to be bearish in the near future may consider the Capital PLC stock. Considering the two investment options,