This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Stock A has an expected return of 12% and a standard deviation of 23%. Stock B has an expected ... (Read 60 times)

hannahmadyronde

  • Full Member
  • ***
  • Posts: 134
on: Aug 7, 2023
Stock A has an expected return of 12% and a standard deviation of 23%. Stock B has an expected return of 16% and a standard deviation of 31%. The risk-free rate is 6% and the market risk premium, rM– rRF, is 7%. Assume that the market is in equilibrium. Portfolio AB has 50% invested in Stock A and 50% invested in Stock B. The returns of Stock A and Stock B are independent of one another; that is, the correlation coefficient between them is zero. Which of the following statements is correct?

◦

Since the two stocks have zero correlation, Portfolio AB is riskless.


◦

Stock A’s beta is 0.8571.


◦

Stock B’s beta is 1.2510.


◦

Portfolio AB’s required return is 13%.

Financial Management: Theory and Practice ¦ Brigham, Ehrhardt, Gessaroli, Nason ¦ 4th Edition
Buy Test-Bank


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by hannahmadyronde on Aug 7, 2023

Mynameisrandom

  • Full Member
  • ***
  • Posts: 178
Reply #1 on: Aug 7, 2023
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
Answer Preview
Only 50% of students answer this correctly


hannahmadyronde

  • Member
  • Posts: 134
Reply 2 on: Aug 7, 2023
:D TYSM

bulacsom

  • Member
  • Posts: 329
Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

« previous next »
 

Did you know?

About 80% of major fungal systemic infections are due to Candida albicans. Another form, Candida peritonitis, occurs most often in postoperative patients. A rare disease, Candida meningitis, may follow leukemia, kidney transplant, other immunosuppressed factors, or when suffering from Candida septicemia.

Did you know?

Medications that are definitely not safe to take when breastfeeding include radioactive drugs, antimetabolites, some cancer (chemotherapy) agents, bromocriptine, ergotamine, methotrexate, and cyclosporine.

Did you know?

According to the CDC, approximately 31.7% of the U.S. population has high low-density lipoprotein (LDL) or "bad cholesterol" levels.

Did you know?

Giardia is one of the most common intestinal parasites worldwide, and infects up to 20% of the world population, mostly in poorer countries with inadequate sanitation. Infections are most common in children, though chronic Giardia is more common in adults.

Did you know?

The average office desk has 400 times more bacteria on it than a toilet.

Elementary particles included in the Standard Model Elementary particles included in the Standard Model
Standard Alcoholic Drink Sizes Standard Alcoholic Drink Sizes
Standard precaution guidelines. Additional guidelines/protocols may be utilized depending on the ... Standard precaution guidelines. Additional guidelines/protocols may be utilized depending on the ...
Fuel should be heard returning to the fuel tank at the fuel return line if the fuel-pump and ... Fuel should be heard returning to the fuel tank at the fuel return line if the fuel-pump and ...
Mobilize neck in wavelike motion. Return the head to a neutral position facing upward. Apply ... Mobilize neck in wavelike motion. Return the head to a neutral position facing upward. Apply ...
Stock Market Tracks Growth in GDP Stock Market Tracks Growth in GDP
Video: Egg and Sperm Formations in Animals Animation

For a complete list of videos, visit our video library