Estimating risk and return

CRITERIA 

NON-PERFORMANCE 

BASIC 

PROFICIENT 

DISTINGUISHED 

Explain why expected return is considered forward-looking. 

Does not explain why expected return is considered forward-looking. 

Explains why expected return is considered forward-looking but omits key elements. 

Explains why expected return is considered forward-looking. 

Analyzes why expected return is considered forward-looking and connects the analysis to relevant real-world examples. 

Identify challenges for practitioners in using expected return. 

Does not identify challenges for practitioners in using expected return. 

Identifies challenges for practitioners in using expected return but omits key elements. 

Identifies challenges for practitioners in using expected return. 

Analyzes challenges for practitioners in using expected return and connects the analysis to relevant real-world examples. 

Explain how different allocations between the risk-free security and the market portfolio can achieve any level of desired market risk. 

Does not explain how different allocations between the risk-free security and the market portfolio can achieve any level of desired market risk. 

Explains how different allocations between the risk-free security and the market portfolio can achieve any level of desired market risk but omits key elements. 

Explains how different allocations between the risk-free security and the market portfolio can achieve any level of desired market risk. 

Analyzes how different allocations between the risk-free security and the market portfolio can achieve any level of desired market risk and connects the analysis to relevant real-world examples. 

Calculate expected return, considering the possibility of differing economic states. 

Does not calculate expected return, considering the possibility of differing economic states. 

Calculates expected return, considering the possibility of differing economic states, using inaccurate or incomplete information. 

Calculates expected return, considering the possibility of differing economic states. 

Calculates expected return, considering the possibility of differing economic states, and explains the calculation. 

Calculate required return, considering the risk-free rate and the risk premium. 

Does not calculate required return, considering the risk-free rate and the risk premium. 

Calculates required return, considering the risk-free rate and the risk premium, using inaccurate or incomplete information. 

Calculates required return, considering the risk-free rate and the risk premium. 

Calculates required return, considering the risk-free rate and the risk premium, and explains the calculation. 

Calculate the market risk premium of the Standard and Poor's 500 Index, showing applicable input values, computational steps, and formulas.

Does not calculate the market risk premium of the Standard and Poor's 500 Index showing applicable input values, computational steps, and formulas. 

Calculates the market risk premium of the Standard and Poor's 500 Index, showing applicable input values, computational steps, and formulas, using inaccurate or incomplete information. 

Calculates the market risk premium of the Standard and Poor's 500 Index, showing applicable input values, computational steps, and formulas. 

Calculates the market risk premium of the Standard and Poor's 500 Index, showing applicable input values, computational steps, and formulas, and explains the calculations. 

Calculate required return using the capital asset pricing model. 

Does not calculate required return using the capital asset pricing model. 

Calculates required return using the capital asset pricing model but uses inaccurate or incomplete information. 

Calculates required return using the capital asset pricing model. 

Calculates required return using the capital asset pricing model and explains the calculation. 

Calculate the beta of a portfolio, showing applicable input values, computational steps, and formulas.

Does not calculate the beta of a portfolio, showing applicable input values, computational steps, and formulas. 

Calculates the beta of a portfolio, showing applicable input values, computational steps, and formulas, using inaccurate or incomplete information. 

Calculates the beta of a portfolio, showing applicable input values, computational steps, and formulas. 

Calculates the beta of a portfolio, showing applicable input values, computational steps, and formulas, and explains the calculation.