FIGURE 12.1 Walgreens and Microsoft Stock Prices, 1998-2003

TABLE 12.1 Finding the Variances for the Returns on Walgreens and Microsoft

FIGURE 12.2 Normal Distribution

TABLE 12.2 Distribution of Returns for Walgreens and Microsoft

TABLE 12.3 Historical Returns and Standard Deviations of Returns From Different Assets, 1926-2003

FIGURE 12.3 Price Reactions in Efficient and Inefficient Markets

FIGURE 12.4 Stock Market Average Price Reaction to Positive and Negative Earnings Surprises

TABLE 12.4 Portfolio Return Calculations Based on 50 % Investment in Walgreens and 50 % in Microsoft

FIGURE 12.5 Portfolio Returns When Investments are Equally Weighted Between the Two Stocks

FIGURE 12.6A Airline and Energy Stock Returns

FIGURE 12.6B Portfolio of 50% Airlines and 50% Energy Stocks

TABLE 12.5 Diversification Example

FIGURE 12.7 Risk and Portfolio Diversification

FIGURE 12.8 Risk and Portfolio Diversification

FIGURE 12.9 Comparing Asset Returns over Time with Those of the Market Portfolio

TABLE 12.6 Example of Stock Betas

FIGURE LE 12.1 Graph of Estimating Beta

FIGURE LE 12.2 Plot Returns for Microsoft and the S&P 500

FIGURE LE 12.3 Security Market Line