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

Author Question: Both assets B and C plot on the SML. Asset B has a beta of 1.3 and an expected return of 13.1. Asset ... (Read 93 times)

bucstennis@aim.com

  • Hero Member
  • *****
  • Posts: 532
on: Jul 10, 2018
Both assets B and C plot on the SML. Asset B has a beta of 1.3 and an expected return of 13.1. Asset C has a beta of 0.50 and an expected return of 7.50. The risk-free rate is 4 and the expected return on the market portfolio is 11.
 
  If you wish to hold a portfolio consisting of assets B and C, and have a portfolio beta equal to 1.0, what proportion of the portfolio must be in asset C?
  A) 0.375
  B) 0.50
  C) 0.625
  D) 0.75

Question 2

A review of the Housing Affordability Index indicates that since the early 1990s, housing affordability has
 
  A)
 
  had an overall upward trend until about 2004.
  B)
 
  has remained relatively constant.
  C)
 
  has had an overall downward trend.
  D)
 
  has had dramatic upward and downward swings.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

ApricotDream

  • Sr. Member
  • ****
  • Posts: 336
Reply #1 on: Jul 10, 2018
Answer to Question 1

Answer: A
Explanation: A) P = w  B + (1 - w)  C = 1.0 = w  1.3 + (1 - w)  0.50, w = 0.375.

Answer to Question 2

A


bucstennis@aim.com

  • Hero Member
  • *****
  • Posts: 532
Reply #2 on: Jul 10, 2018
TY


ApricotDream

  • Sr. Member
  • ****
  • Posts: 336
Reply #3 on: Jul 10, 2018
Happy to Help


« previous next »
 

Did you know?

In inpatient settings, adverse drug events account for an estimated one in three of all hospital adverse events. They affect approximately 2 million hospital stays every year, and prolong hospital stays by between one and five days.

Did you know?

A recent study has found that following a diet rich in berries may slow down the aging process of the brain. This diet apparently helps to keep dopamine levels much higher than are seen in normal individuals who do not eat berries as a regular part of their diet as they enter their later years.

Did you know?

Patients who cannot swallow may receive nutrition via a parenteral route—usually, a catheter is inserted through the chest into a large vein going into the heart.

Did you know?

During the twentieth century, a variant of the metric system was used in Russia and France in which the base unit of mass was the tonne. Instead of kilograms, this system used millitonnes (mt).

Did you know?

The Romans did not use numerals to indicate fractions but instead used words to indicate parts of a whole.

Triangle plot showing gene expression related to xylem, phloem, and nonvascular tissue in Arabidopsi Triangle plot showing gene expression related to xylem, phloem, and nonvascular tissue in Arabidopsi
Lymphatic vessels pick up excess tissue fluid, purify it in the lymph nodes, and then return it to t Lymphatic vessels pick up excess tissue fluid, purify it in the lymph nodes, and then return it to t
How to plot a sine function with a negative amplitude and phase shift (Question 3 of 3) How to plot a sine function with a negative amplitude and phase shift (Question 3 of 3)
Expected Distribution of IQ Scores Expected Distribution of IQ Scores
Human beta-globin–complex locus control region Human beta-globin–complex locus control region
Mutations in the Beta Globin Gene Mutations in the Beta Globin Gene
Video: Monohybrid crosses

For a complete list of videos, visit our video library