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 133 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
Excellent

pratush dev

  • Member
  • Posts: 321
Reply 3 on: Yesterday
Wow, this really help

« previous next »
 

Did you know?

The strongest synthetic topical retinoid drug available, tazarotene, is used to treat sun-damaged skin, acne, and psoriasis.

Did you know?

Ether was used widely for surgeries but became less popular because of its flammability and its tendency to cause vomiting. In England, it was quickly replaced by chloroform, but this agent caused many deaths and lost popularity.

Did you know?

People often find it difficult to accept the idea that bacteria can be beneficial and improve health. Lactic acid bacteria are good, and when eaten, these bacteria improve health and increase longevity. These bacteria included in foods such as yogurt.

Did you know?

The calories found in one piece of cherry cheesecake could light a 60-watt light bulb for 1.5 hours.

Did you know?

Green tea is able to stop the scent of garlic or onion from causing bad breath.

Shark - These species are all at risk of extinction Shark - These species are all at risk of extinction
The greater honeyguide, Indicator indicator. The greater honeyguide, Indicator indicator.
Risk Factors for Developing Breast Cancer Risk Factors for Developing Breast Cancer
The malfunction indicator lamp might be labeled “service engine soon,” which can cause ... The malfunction indicator lamp might be labeled “service engine soon,” which can cause ...
Risk Factors of Osteoporosis Risk Factors of Osteoporosis
The Risk of Nuclear Power The Risk of Nuclear Power
Video: Cellular defenses (natural killer cells, phagocyte types & process of phagocytosis)

For a complete list of videos, visit our video library