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

Author Question: Most stock analysts would agree that more variance is an indicator of less risk. Indicate whether ... (Read 91 times)

mynx

  • Hero Member
  • *****
  • Posts: 555
on: Jul 10, 2018
Most stock analysts would agree that more variance is an indicator of less risk.
 
  Indicate whether the statement is true or false.

Question 2

You have been asked to analyze two stocks, Stock A and Stock B. The beta of stock A is 1.2, and the beta of stock B is 0.8. The expected return on stock A is 13.5, the expected return on stock B is 11.0 and the risk-free rate is 7.
 
  We also know that stock A is fairly priced. Which of the following regarding Stock B must be true?
  A) The expected return on stock A is too high.
  B) Stock B is also fairly priced.
  C) The price of stock B is too high.
  D) The expected return on stock B is too high.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

isabelt_18

  • Sr. Member
  • ****
  • Posts: 342
Reply #1 on: Jul 10, 2018
Answer to Question 1

Answer: FALSE
Explanation: Most stock analysts would agree that more variance is an indicator of MORE risk.

Answer to Question 2

C


mynx

  • Member
  • Posts: 555
Reply 2 on: Jul 10, 2018
Gracias!

smrtceo

  • Member
  • Posts: 344
Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

« previous next »
 

Did you know?

Never take aspirin without food because it is likely to irritate your stomach. Never give aspirin to children under age 12. Overdoses of aspirin have the potential to cause deafness.

Did you know?

As many as 28% of hospitalized patients requiring mechanical ventilators to help them breathe (for more than 48 hours) will develop ventilator-associated pneumonia. Current therapy involves intravenous antibiotics, but new antibiotics that can be inhaled (and more directly treat the infection) are being developed.

Did you know?

About 3% of all pregnant women will give birth to twins, which is an increase in rate of nearly 60% since the early 1980s.

Did you know?

Famous people who died from poisoning or drug overdose include, Adolf Hitler, Socrates, Juan Ponce de Leon, Marilyn Monroe, Judy Garland, and John Belushi.

Did you know?

The longest a person has survived after a heart transplant is 24 years.

Many hobbies and leisure activities have some risk of health-related injuries Many hobbies and leisure activities have some risk of health-related injuries
Risk for injury Risk for injury
Physical Fitness and Cancer Risk Physical Fitness and Cancer Risk
Risk assessment analyzes Risk assessment analyzes
Offshore spawning stock biomass, Grand Bank Atlantic Cod since the early 1980s Offshore spawning stock biomass, Grand Bank Atlantic Cod since the early 1980s
Daniel's Enterprises has a beta of 1.98 and a growth rate of 12 percent. The stock is ... Daniel's Enterprises has a beta of 1.98 and a growth rate of 12 percent. The stock is ...
Video: Properties of water -structure of water and polarity (Ionized and polar compounds)

For a complete list of videos, visit our video library