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 14 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
Thanks for the timely response, appreciate it

covalentbond

  • Member
  • Posts: 336
Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

« previous next »
 

Did you know?

Many of the drugs used by neuroscientists are derived from toxic plants and venomous animals (such as snakes, spiders, snails, and puffer fish).

Did you know?

The use of salicylates dates back 2,500 years to Hippocrates’s recommendation of willow bark (from which a salicylate is derived) as an aid to the pains of childbirth. However, overdosage of salicylates can harm body fluids, electrolytes, the CNS, the GI tract, the ears, the lungs, the blood, the liver, and the kidneys and cause coma or death.

Did you know?

Congestive heart failure is a serious disorder that carries a reduced life expectancy. Heart failure is usually a chronic illness, and it may worsen with infection or other physical stressors.

Did you know?

There can actually be a 25-hour time difference between certain locations in the world. The International Date Line passes between the islands of Samoa and American Samoa. It is not a straight line, but "zig-zags" around various island chains. Therefore, Samoa and nearby islands have one date, while American Samoa and nearby islands are one day behind. Daylight saving time is used in some islands, but not in others—further shifting the hours out of sync with natural time.

Did you know?

In women, pharmacodynamic differences include increased sensitivity to (and increased effectiveness of) beta-blockers, opioids, selective serotonin reuptake inhibitors, and typical antipsychotics.

In 2008, the U.S. economy suffered a gaping wound as several trillion dollars were ripped out of it. In 2008, the U.S. economy suffered a gaping wound as several trillion dollars were ripped out of it.
Return of oxygenated blood to the heart and entry into the aorta (red = oxygenated blood, blue = ... Return of oxygenated blood to the heart and entry into the aorta (red = oxygenated blood, blue = ...
Some Standard Shapes of Greek Vessels Some Standard Shapes of Greek Vessels
A karyotype arranges the chromosomes in a standard format A karyotype arranges the chromosomes in a standard format
Chiropractor (stock image) Chiropractor (stock image)
Standard Electrode Potentials at 25 Degrees Standard Electrode Potentials at 25 Degrees
Video: Resting membrane potential - electrical polarity and maintenance requirements

For a complete list of videos, visit our video library