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Author Question: Stock A has an expected return of 12% and a standard deviation of 23%. Stock B has an expected ... (Read 80 times)

hannahmadyronde

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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
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Marked as best answer by hannahmadyronde on Aug 7, 2023

Mynameisrandom

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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.
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hannahmadyronde

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Reply 2 on: Aug 7, 2023
Wow, this really help

aruss1303

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

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