The document discusses the Sharp Index model for calculating the expected return of a portfolio. It provides the formula for calculating the Sharpe ratio which takes into account the variance of the market index, variance of individual stock movements not associated with the market, and the beta of each stock. It also mentions there are examples provided to demonstrate solving the Sharpe ratio formula.

1. SECURITY ANALYSIS & PORTFOLIO MGT. Sharp Index Modal

2. Group Members Arun Jagtap 19 Nikhil Monde 32 Abhishek Rane 39 Sujit Gupta 59

20. N σ m 2 (R i ─ R f )β i σ ei 2 i=1 C i = N 1 + σ m 2 β i 2 σ ei 2 i =1

21. Where, σ m 2 = Variance of the Market Index σ ei 2 = Variance of a stock’s movement that is not associated with the movement of Market Index i.e. stock’s unsystematic risk.

22. EXAMPLE- 1:

23. SOLUTION OF EXAMPLE- 1:

29. SOLUTION OF EXAMPLE- 2:

32. N σ m 2 (R i ─ R f )β i σ ei 2 i=1 C i = N 1 + σ m 2 β i 2 σ ei 2 i =1

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